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Providence, Swedish Health Systems Announce Affiliation

January 01, 2012

Officials from locally-based Providence Health & Services and Swedish Health Services today announced plans to form an innovative affiliation that will improve health care quality, access and affordability for the residents of Western Washington. This unique affiliation will allow both organizations, which have each served the Puget Sound area for more than 100 years, to collaborate to better deliver health care to the region while at the same time maintaining their individual identities and heritage.

Under the proposed plan, the two organizations will form a new not-for-profit health care system that will include all of Swedish’s operations in King, Snohomish and Kittitas Counties and all of Providence’s operations in King, Snohomish, Thurston and Lewis Counties. Providence will keep the Providence name and its Catholic identity, while Swedish will keep the Swedish name and remain a non-religious organization.

The two not-for-profit organizations recently signed a memorandum of understanding, and are now working on the details of the proposed affiliation. Regulatory review and approval of the new operating arrangement may take some time; until then, the two organizations will continue to operate independently.

"Through this unique operating arrangement, we are able to preserve each organization’s heritage and local operations, while providing a better and more affordable level of patient care across both organizations," said John Koster, MD, Providence Health & Services president and CEO. "We had to think beyond merger or acquisition to accomplish this, and this affiliation is really the best of both worlds. The shared knowledge and capabilities of Providence and Swedish will benefit our communities for many, many years to come."

“Health care in this country is at a crossroads. Having served the community for more than a century, we believe it is our responsibility to lead the region through these challenging times. By sharing the resources, best practices and expertise of two great institutions, we can address the nation’s health care crisis at a local level and create one of the best health care systems in the country,” said Rod Hochman, MD, president and CEO of Swedish.

One benefit of the affiliation will be a common electronic health record that will connect Providence and Swedish hospitals, outpatient centers and doctors’ offices throughout Western Washington to better serve patients and help improve their health. In addition, by sharing resources, both organizations can make it easier to access health care across the entire range of services – from primary care, specialized care, research and hospice and long-term care.

By working together, Providence and Swedish can reduce costs by better organizing how care is delivered. Both organizations will be able to create improved models for delivering care and approaches to chronic disease management, which in turn will make health care more affordable for government payers, commercial insurers, employers and patients.

Both leaders, who are also physicians, believe that each organization’s complementary community service missions will serve as a strong foundation for success. “Knowing that greater collaboration among providers is the future of health care, Swedish had been seeking the right partner for a few years,” said Dr. Hochman. “We evaluated many different options. But at the end of the day, there was only one partner that made sense. Like Swedish, Providence is a mission-driven organization with a strong commitment to providing high-quality health care to everyone, including underserved populations. It was important to find a partner who shared that as a core value.”

Last year, Providence and Swedish provided a combined total of more than $205 million in community benefit in Western Washington, including $61.4 million in free and discounted care for those who could not afford to pay for care.

In light of economic challenges, philanthropy has, and will continue to be vital to the missions of both organizations. Through this innovative affiliation, Providence and Swedish will maintain their individual foundations, and they will continue to operate separately and independently. That means gifts made to the Providence foundations will only go to Providence, and gifts made to the Swedish Foundation will only go to Swedish.

“The economic challenges facing our cities, state and country are daunting, and won’t be any less challenging until we begin to offer innovative solutions,” said Dr. Koster. “Together, Providence and Swedish can dramatically impact health care cost and access for all who live in the communities we serve.”

About Swedish Health

Swedish Health Services is a private, not-for-profit organization founded in 1910 with five hospitals, more than 70 primary care and specialty clinics, three ambulatory care centers, a home-care division and 11,000 employees in Greater Seattle, including the Eastside, South Snohomish County and Cle Elum.

About Providence Health & Services

Providence Health & Services is a Catholic, not-for-profit organization founded by the Sisters of Providence in 1856 with 27 hospitals, 214 physician clinics and almost 53,000 employees across five states. Based in Renton, Washington, Providence Health & Services provides strategic and management services to integrated health care systems in Alaska, California, Montana, Oregon and Washington.