Providence Health & Services and Swedish Health Services to affiliate

November 1, 2011

Providence Health & Services and Swedish Health Services plan to form an affiliation of their Western Washington facilities, potentially by early next year.

The plan calls for the Renton, Wash.-based Providence and the Seattle-based Swedish to form a new not-for-profit system that will be organized as a region within Providence. The systems will not be combining assets, but they will be integrating their operations and will be part of the same obligated group sharing a common bottom line, according to Jack Mudd, senior vice president of mission leadership for Providence.

According to a Providence spokeswoman, the new system will not be named. Providence's regions outside of Western Washington will not be part of the affiliation.

Mudd said the arrangement will enable each affiliate to retain its own identity, mission and values. Both Providence and Swedish will retain their names. Providence will remain Catholic, following the Ethical and Religious Directives for Catholic Health Care Services, while Swedish will remain nonsectarian. Once the affiliation is complete, Swedish facilities no longer will perform elective abortions; currently, Swedish provides a limited number of abortions, according to a Providence spokeswoman.

Plans call for representatives of Swedish to join the Providence board, where they will be filling open seats.

Each affiliate will continue to operate its foundation independently.

Dr. John Koster, president and chief executive of Providence, said the affiliation will enable Providence and Swedish to better allocate resources, to develop programs in new ways, to improve health care access and to be more innovative.

Swedish President and Chief Executive Dr. Rod Hochman said that the two systems have collaborated on smaller-scale programs, such as supply purchasing, and realized that in light of local and national health care challenges, grander-scale collaboration was in order.

Mudd said many of the challenges have to do with declining reimbursements for health care services, particularly when it comes to Medicaid. By affiliating, he said, the systems can achieve greater scale and deliver care more efficiently.

Providence and Swedish have signed a memorandum of understanding on the affiliation and are seeking regulatory review and approval.


About the health systems

Providence Health & Services   Swedish Health Services
• A not-for-profit system founded by the Sisters of Providence   • A private, not-for-profit health system
• Includes 27 hospitals and 214 physician clinics plus other facilities. Three of those hospitals, and a network of senior community services and other services, are located in Western Washington   • Includes five hospitals, more than 70 primary care and specialty clinics as well as other facilities
• Nearly 53,000 employees   • Employs 11,000
• Operates in Alaska, California, Montana, Oregon and Washington   • Operates in Western Washington

 

Copyright © 2011 by the Catholic Health Association of the United States
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