Renton-based Providence in talks for massive hospital merger with Ascension


Renton-based Providence St. Joseph Health has been in talks with Ascension Health on a possible merger that would create the nation’s largest hospital network, according to two people familiar with the matter.

The two Catholic health organizations have been exploring the possibility of joining forces for months, according to one of the people who spoke to The Seattle Times on condition of anonymity to discuss sensitive information. One person familiar with the effort said the two systems have grown closer in recent weeks with the development of an agreement that would allow the two sides to share anonymized patient data.

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Another person, however, said that it did not appear that any deal was imminent.

It isn’t clear how the two organizations would consolidate administrative staff and executive leadership. One person, speaking on condition of anonymity, said the talks have included discussion about moving the joint headquarters to Chicago as part of the deal. That could impact thousands of staffers who work for Providence or for St. Louis-based Ascension.

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A Providence spokeswoman declined to comment. A telephone message left with a spokesman for Ascension was not immediately returned.

The possible merger, first reported by The Wall Street Journal, would bring to a new level the consolidation trend in health care. The joint organization would account for 191 hospitals in more than half of the states, surpassing the 177 hospitals of HCA Healthcare.

The two systems now compete in largely different markets — Providence in the West, Ascension in the South and Midwest. The two have some overlap in Texas and also in Washington, where Ascension controls Pasco-based Lourdes Health Network.

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The Journal reported the church authorities would need to sign off on any merger.

Providence began in the mid-1800s as a mission to Vancouver, Washington, where Catholic sisters established schools, hospitals and other facilities to care for burgeoning new communities.

Providence’s health-care mission has grown to become a dominant network across the West Coast. It now oversees 50 hospitals, thanks to mergers with both Swedish Health Services in 2012 and California-based St. Joseph Health last year.

The Seattle Times has been writing stories this year about the changes at Swedish and troubles at a neurosurgery center there in the years since the Providence merger. Staffers have expressed concerns that the organization has been focusing less on patient care and more on profits.

Providence CEO Rod Hochman was once the CEO of Swedish before the organizations joined together. He was involved in the recruitment of one top neurosurgeon who resigned after Times articles earlier this year.

Hochman initially distanced himself from the turmoil at Swedish but then later apologized, telling the public in a full-page ad that people “deserved better from us — and from me.”

The emerging news of the Providence-Ascension talks comes just days after Catholic Health Initiatives and Dignity Health announced an agreement to merge. That combination will include 139 hospitals in 28 states, according to the companies.

It isn’t just hospital organizations that are consolidating in the world of health care. In recent days, the drugstore chain CVS Health announced a $69 billion acquisition plan of the insurer Aetna.

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