Legacy Health, Portland, Ore., and PacificSource Health Plans, Springfield, Ore., announced Monday that they'll team up in an effort to reduce costs and improve healthcare quality.
Legacy, a six-hospital health system, will make a 50% investment in not-for-profit insurer PacificSource over the next five years, said George Brown, president and CEO of Legacy Health.
PacificSource will create and own half of a new organization.
Brown said Legacy will make an initial $100 million investment and will purchase the remaining 50% of the organization. Ken Provencher, president and CEO of PacificSource, said the other entity was created to “look out for our interests over the long term.”
The partnership will result in the creation of a health plan with new products and services for consumers, according to the press release. Both organizations will work together to improve access and affordability of care.
“There is a seamless continuum of insurance and care providers working to keep patients healthy and do so in a manner that is efficient,” Brown said. “We have an alignment around our agenda.”
The 15-member board for the new organization will consist of six members from both Legacy and PacificSource, and three community members.
Both organizations will maintain partnerships with other providers and insurance companies. The two companies' employees are not expected to be affected, Brown said. Legacy Health employs 10,000 and PacificSource employs 700.
Partnerships between providers and health systems usually improve care for patients and decrease costs because the systems' capabilities complement each other, said Dr. Elliott Fisher, director of the Dartmouth Institute for Health Policy and Clinical Practice.
Fisher said health systems can determine appropriate costs for certain procedures while providers can provide comprehensive data on patients.
“It's rare that any single organization is going to have all of the capabilities they need to both transform the care that is actually delivered and succeed under new value-based payment models,” Fisher said.
Legacy Health operates in Oregon and Washington. PacificSource Health Plans serves 280,000 people throughout the northwest.
The plan to create the new organization will likely be approved in six months.
