Providence Health & Services, Renton, Wash., and Swedish Health Services, Seattle, said they are combining their western Washington operations in a new not-for-profit system, according to a news release (PDF).

Providence and Swedish have agreed to a memorandum of understanding on the new system and are working on a final operating agreement, according to the release. No financial terms were disclosed.

Providence will contribute its operations in King, Snohomish, Thurston and Lewis counties to the new system, including three hospitals in Centralia, Everett and Olympia. Swedish will contribute its operations in King, Kittitas and Snohomish counties, including two hospitals with four campuses in Seattle, a hospital in Edmonds, and a new hospital that will open for inpatients Nov. 1 in Issaquah.

Providence's facilities will continue to operate according to Catholic ethical and religious directives, and Swedish's facilities will remain secular. Each organization will continue to maintain its own foundation.

The two partners plan to develop a common electronic health-record system in hospitals, outpatient centers and physician offices in the system. Providence and Swedish expect their combination to reduce costs with better organized delivery of care, especially for patients with chronic conditions, according to the release.

The deal requires regulatory approvals; no time frame for completing the deal was announced.