Healthcare Business News

Affiliation finalized for Providence, Swedish in Wash.

By Ashok Selvam
Posted: February 1, 2012 - 2:30 pm ET

A newly finalized deal will combine the western Washington operations of Providence Health & Services, Renton, Wash., and Swedish Health Services, Seattle.

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The deal, which officials describe as an affiliation, creates a new region for Providence by combining Swedish's and Providence's northwest and southwest Washington operations. A Providence filing to bondholders calls the new not-for-profit corporation Western HealthConnect. The names and brandings for the two groups will remain the same. Providence will remain a Catholic entity, and Swedish will remain secular. Providence will add five members to its board from Swedish's board.

Providence and Swedish stated earlier that by pooling resources, they will be able to reduce expenses. There is no exchange of money, according to the bondholder filing.

“This is an exciting day for both organizations," Dr. John Koster, Providence Health & Services president and CEO, said in a news release. "Together, we will reach new levels of excellence and will be able to improve quality and access for Western Washington in a way we couldn't as separate organizations."

The state's health department ruled that a certificate of need wasn't needed to move forward with the deal (PDF).

Providence also named the leadership team for the new Washington region. Arnie Schaffer will serve as executive vice president and chief executive of the new region. Dr. Rod Hochman will serve as one of two group presidents for Providence's five-state system. Providence COO Mike Butler was promoted to group president for Providence Health & Services. Kevin Brown will serve as chief executive for Swedish Health Services.

Providence runs hospitals in Alaska, California, Montana, Oregon and Washington.

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