OHSU, Legacy Health announce end to merger plans, labor union ‘disappointed’

PORTLAND, Ore. (KOIN) – The long-planned merger between OHSU and Legacy Health has come to a sudden end.

According to the Oregon Nurses Association, the two organizations have “mutually agreed to end their deal to merge” — more than a year since they announced the plan in August 2023.

The announcement comes just a month after a community review board announced its opposition to the business deal. The board, formed by Oregon Health Authority, consisted of six community members connected to the healthcare industry.

The merger would have combined more than 32,000 employees and 100 locations from the nonprofit health system Legacy and public research university OHSU. The education institution had committed $1 billion to expand services for the joint system, but opponents argued it would drive up costs.

“There may also be an opportunity for OHSU to acquire or partner in a different way with specific facilities or specific sectors of Legacy, but ultimately, this is too big, too many risks for us to put enough regulators on,” board member Wendy Martin said during the announcement on April 7.

Following the announcement, ONA said it was still “confident” the deal would be approved. On Monday, the trade union said it has supported the deal because, “ultimately, we believed it would lead to better working conditions for frontline caregivers and high standards for patient care.”

“While we are disappointed with their decision to terminate the deal, this will not impact ONA’s ongoing work to organize frontline caregivers and fight for fair contracts that prioritize workers and patients over profits,” the trade union said.

OHSU and Legacy Health shared the following joint statement on Monday:

In August 2023, Oregon Health & Science University and Legacy Health announced their intent to combine and create an integrated health system. Today, the organizations have entered into a mutual agreement to terminate the transaction. After careful consideration of the evolving operating environment, the organizations have determined that the best way to meet the needs of the communities they serve is to move forward as individual organizations. OHSU and Legacy will remain focused on each health system’s individual strategic objectives, with the goal of remaining well-positioned to continue supporting their people, patients and communities. OHSU and Legacy Health will continue to promote the health and well-being of people in Oregon, Southwest Washington and beyond. 

Eric Fruits with the International Center for Law and Economics said that, between a shifting economy and recent pushback, he’s not shocked.

“They were, you know, two of the biggest providers in the Portland region,” he said. “And so that’s already going to raise some red flags.”

Fruits said this is especially true as the area faces financial and regulatory headwinds.

“There’s a real risk that the state itself may throw up some roadblocks,” he said. “And even if they did allow the merger to go through, they might impose so many conditions…that it may not actually pencil out financially anymore.”

But Fruits says potential cuts under the Trump Administration could threaten OHSU’s ability to take Legacy under its wing.

“President Trump has threatened to cut National Institutes of Health funding, reducing funding for the National Primate Research Center, and that could end up being 10s or hundreds of millions of dollars for OHSU,” he said. “And so in that sense, even if OHSU was in a stronger financial position when the deal was mentioned, they may not be in that same position today.”

Stay with KOIN 6 News as this story develops.