RENTON, Wash.—Providence Health & Services will combine its western Washington operations with Swedish Health Services, Seattle. Under an affiliation agreement executed Jan. 26, the names for the two groups will remain the same, and Providence will remain Catholic while Swedish will remain secular.
Providence elaborated on some of the details in a filing to bondholders. Swedish—including 624-bed Swedish Medical Center and 198-bed Cherry Hill Campus, both in Seattle, and 156-bed Swedish/Edmonds (Wash.)—will form a new not-for-profit called Western HealthConnect, and Providence will transfer its western Washington operations to a new division, according to the filing. Together they will “become a new not-for-profit health system serving the residents of Western Washington.” The agreement calls for Western HealthConnect to become part of the Providence obligated group for future borrowing but stipulates that Providence assumes no liability for existing Swedish debt. The deal involves no exchange of money, merger of legal entities or transfer of assets, though Providence “has agreed to a significant capital commitment over 10 years on projects of Western HealthConnect or Swedish.” The systems announced that Providence executive Arnold Schaffer will serve as executive vice president and chief executive of the new Providence division and oversee integration of the organizations; he previously led Providence’s regional operations in Alaska, Washington, California and Montana. Swedish President and CEO Dr. Rod Hochman will be one of two group presidents for Providence’s five-state system. Kevin Brown, who was chief strategy officer for Swedish, will serve as chief executive for Swedish Health Services. Providence Chief Operating Officer Mike Butler was promoted to group president for Providence Health & Services.
AURORA, Colo.—The University of Colorado Hospital and the two-hospital Poudre Valley Health System will operate as University of Colorado Health under a joint operating agreement. The agreement, first announced in June, created a new governing board for the three hospitals with authority to borrow for capital investments and oversee operations, with some exceptions that will require approval from hospital governing boards, said Bruce Schroffel, president and chairman of University of Colorado Health. Schroffel was formerly president and CEO of University of Colorado Hospital. Rulon Stacey, president and CEO of Poudre Valley Health System, was named CEO of the joint health system. The 11-member board will include Stacey, Schroffel, four members from Poudre Valley Health System, three members from the University of Colorado Hospital and two members from the University of Colorado, Schroffel said. The new organization will include University of Colorado Hospital, a 437-bed hospital in Aurora; the two-campus 238-bed Poudre Valley Hospital, Fort Collins, Colo.; and 136-bed Medical Center of the Rockies, Loveland, Colo. The organizations are in talks to lease 548-bed Memorial Health System, Colorado Springs, Colo.
LOS ANGELES—A federal judge blocked the state of California from cutting Medicaid payments by 10% for physicians, clinics, pharmacists, dentists, ambulance providers and durable medical equipment suppliers. Trade associations representing the providers sued the California Department of Health Care Services and HHS arguing that the cuts violated federal law requiring that Medicaid programs ensure access to services, and that federal officials failed to appropriately consider the impact of the cuts in approving them. U.S. District Judge Christina Snyder wrote in a 25-page ruling that the groups that brought the lawsuit have a strong likelihood of succeeding in the argument that the CMS approval was “arbitrary and capricious.” California officials argued that providers don’t have standing to sue to enforce federal requirements. Snyder ruled they do unless the U.S. Supreme Court rules otherwise in another California Medicaid case heard by the high court in October. “The state’s repeated attempt to slash Medi-Cal reimbursement rates is a short-sighted solution that balances the budget on the backs of the poorest and most vulnerable Californians,” Dr. James Hay, president of the California Medical Association, one of the plaintiff organizations, said in a news release. Snyder issued a preliminary injunction last month blocking similar cuts to hospital-based skilled-nursing in a separate lawsuit brought by the California Hospital Association.
