Release: PacMed and Providence Propose Affiliation

MONDAY, FEBRUARY 3                                         

Pacific Medical Centers and Providence Health & Services propose affiliation

SEATTLE – Today Pacific Medical Centers (PacMed) announced its intention to enter a secular affiliation with Providence Health & Services. This affiliation brings together PacMed’s successful model of delivering high quality coordinated care at an affordable cost and Providence’s history of delivering compassionate, quality care across the Northwest. The goal of the affiliation is to reduce the cost of health care for patients, employers and government insurers, while improving health outcomes for patients.

“PacMed wants to change the way health care is organized, delivered and paid for in order to help our communities live healthier lives,” said Harvey Smith, president & CEO of PacMed, which operates nine, multi-specialty clinic locations in the greater Puget Sound area. “We have a long history of working closely with our patients to manage their health care responsibly, while yielding high patient satisfaction, excellent health outcomes and lower costs. On its own, PacMed cannot drive broad changes in the way that health care is delivered. We need to collaborate with an organization that has sufficient resources and a similar community-minded mission and vision to succeed. Not just any partner, but the right partner.”

“After more than a year of careful discussions with many potential affiliates, PacMed has chosen a secular affiliation with Providence Health & Services,” Smith said. “Providence shares our desire to change the delivery care model to ensure high-quality, more affordable care in our communities. We are passionate about all of the positive benefits working together will provide for our communities.”

Providence first brought health care to Washington in 1856 and continues to operate hospitals, clinics, skilled nursing facilities, home health and hospice services, and supportive housing throughout the state.

“We are very excited about a potential affiliation with PacMed. It directly aligns with our core strategy to create healthier communities by collaborating with innovative partners. Only by working together will we improve health care and make it more affordable,” commented Rod Hochman, MD, president & CEO of Providence Health & Services.

“Providence was drawn to PacMed because it is an example of an organization that has a successful model for delivering high quality coordinated care at an affordable cost and we want to support that in our community and increase access to this model,” Dr. Hochman said. “Together, we can affect change on a much larger scale by sharing best practice and innovating collaboratively, not only in the Puget Sound region, but across the Providence system.”

In response to health care conditions in 2003, PacMed transitioned to a private, not-for-profit organization, ending more than two decades as part of a city-affiliated public development authority. Through its own independent, fiduciary board of directors it gained the needed flexibility to turn around the organization and achieve long-term financial stability to serve its patients. Once again, in response to the changing health care environment, PacMed seeks a change. PacMed will be discussing the proposed affiliation with the Pacific Hospital Preservation & Development Authority (PHPDA) and will be asking the PHPDA to transfer its “membership” in PacMed to a secular, not-for-profit affiliate of Providence. The PHPDA retained the rights to approve transactions of this type through the 2003 restructure.

Background on the proposed affiliation includes:

• To allow secular affiliates to remain secular and Providence to maintain its Catholic identity, Providence Health & Services created a secular organization – legally referred to as Western HealthConnect. This is the same model successfully used for the affiliation with Swedish Health Services, allowing Providence to remain Catholic and Swedish to remain secular.
• This model will allow PacMed to remain a separate secular 501(c)3 organization, where Western HealthConnect replaces the PHPDA as PacMed’s sole corporate member.
• PacMed will remain secular and its physicians and staff will not be subject to the Ethical and Religious Directives for Catholic Health Care Services.

–          There will be no change. PacMed will not be a Catholic organization. Patients will have the same access to care as they do today. PacMed will continue to prescribe contraceptives, and physicians will continue to perform sterilizations and other procedures as they do today. PacMed currently does not provide elective pregnancy terminations, and physicians will continue to refer patients seeking abortions to outside providers.

–          PacMed does not currently fill prescriptions for lethal medications and that will not change. PacMed will continue to act as a “consulting physician” to any PacMed patient, who considers physician-assisted suicide, but will not act as an “attending physician” or prescribe lethal medications. There will be no restrictions on what a physician can talk to a patient about, including all options available to patients under Washington State’s Death with Dignity Act. PacMed believes this approach respects physician autonomy and the physician-patient relationship while providing careful oversight.

• Both Providence and PacMed serve all patients – from all walks of life – with high quality, compassionate care, regardless of beliefs, gender or sexual orientation and this will not change.
• PacMed’s current board of directors will become the PacMed Community Board, which will share governance responsibility for PacMed with Providence’s secular organization. The Community Board will retain sole oversight of PacMed’s Uniformed Services Family Health Plan (USFHP) contract with the U.S. Department of Defense, separate from the affiliation.
• Once an agreement is reached, both organizations will use the first 120 days to develop a thoughtful plan for working together.

Both organizations are driven by a strong mission to serve everyone, especially those who are poor and vulnerable. Through this proposed affiliation, both organizations believe they can do even more to increase access to services for those most in need.

“Together, we believe we can do a lot more for the community,” added Smith.

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About Pacific Medical Centers

Pacific Medical Centers is a private, not-for-profit, multispecialty health care network with 150 primary and specialty care providers and nine locations across the Puget Sound in Beacon Hill, Canyon Park, Federal Way, First Hill, Lynnwood, Northgate, Puyallup, Renton and Totem Lake.

About Providence Health & Services

Providence Health & Services is a not-for-profit Catholic health care ministry committed to providing for the needs of the communities it serves – especially for those who are poor and vulnerable. Providence’s services include 32 hospitals, 400 physician clinics, senior services, supportive housing and many other health and educational services. The health system and its affiliates employs more than 64,000 people across five states – Alaska, California, Montana, Oregon and Washington – with its system office located in Renton, Washington. In 2012, Providence provided more than $823 million in community benefit, including $272 million in free and discounted care for those who could not afford to pay for care. Providence Health & Services continues a tradition of caring that the Sisters of Providence began more than 158 years ago.