OHSU ties to key players in its merger review reflect a larger problem, some say

This article will be updated.

A consultant who the state hired to manage a high-stakes recommendation on Oregon Health & Science University’s proposed takeover of Legacy Health had wrapped up an assignment working for OHSU just weeks earlier, The Lund Report has learned.

The sum OHSU paid Ronda Zakocs, $4,175.50, may be small, but former Oregon Health Policy Board member John Santa told The Lund Report it appears to be a potential conflict of interest that should be disclosed at every meeting of the state community review board whose work she is leading.

Zakocs' consulting business explicitly markets its services to hospital systems like OHSU. The Oregon Health Authority hired her and her firm to help select members of the board that's making the recommendation on OHSU, as well as help set the board's agendas and other materials, and lead their discussions.

To Santa, a retired physician, former state health administrator who also directed a center assessing hospitals for the nonprofit Consumer Reports, it's just one more example of how state health officials are not managing the state’s health care merger oversight process with the transparency and care that lawmakers intended.

The program's decisions on public input have been “really disturbing,” Santa said. “Over and over, they've had the opportunity to develop a process that the public is more involved in — and they've consistently failed to do that.”

Santa’s comments about Zakocs’ OHSU connection come in the wake of concerns raised about potential conflicts of interest for two members of the ten-member review board that Zakocs was hired to help select.

As first reported by Willamette Week last week,  the Oregon Health Authority received a letter raising the concerns. It was authored by Barbara Jacobson, a retired government attorney.

Ethics officials confirm potential conflict for one review board member

Since then, on Friday, April 4,  Oregon Government Ethics Commission officials issued advice letters  to the two review board members Jacobson highlighted. 

Jacobson told The Lund Report she became familiar with the ethics law while working as City Attorney for the city of Wilsonville. The letters agreed with her that a potential conflict exists for one of the review board members, but did not agree about the other.

Jacobson had noted that one review board member, Joanna Mott, had worked closely with OHSU while an executive at the Oregon Institute of Technology, only to retire and shortly afterward apply to be in the review board.  Ethics commission officials' review of the situation concluded that Mott's past work with OHSU does not constitute a conflict of interest under Oregon ethics law. 

Jacobson had also noted that Jerome Dalnes' had advertised his membership on the commission on his professional LinkedIn page, and his work involves selling equipment to health care companies. The Oregon Government Ethics Commission staff's advice letter to Dalnes agreed with Jacobson that this does constitutes a potential conflict that must be disclosed before any vote.

Consultant defends neutrality

As for Zakocs, the consultant told The Lund Report that her past work for OHSU and the focus of her business — which partners with “foundations, health systems, government agencies, nonprofits, and collaboratives” —do not affect her impartiality. Her work for OHSU continued through October 2024.

On Dec 19, 2024, the Oregon Health Authority's Health Care Merger Oversight program issued a sole-source contract to Zakocs’ firm, Insight for Action. The contract was for $25,000. Its scope included asking the consultant to review board applications and “make recommendations to HCMO staff about member selection,” then provide orientations, meeting support and facilitation, while “leading group discussions” leading to a recommendation on the merger.

 Zakocs should be “a neutral party without a position in the outcome of (the) transaction review or the community review board’s discussions,” according to the contract. 

“I am a neutral convenor,” Zakocs wrote in an email when asked to address her OHSU work and the suggestion that she lacks neutrality. “My job is to facilitate a transparent process for the community review board to make their recommendation. Almost all of my clients are nonprofits, foundations, and local health departments – not health care systems. There is no potential conflict around past or future work with health care systems that impacts my neutrality for this proposed transaction.”

An Oregon Health Authority spokesperson did not respond to a question asking why the program hired Zakocs' firm despite her past work for OHSU. 

But the spokesperson did send a statement asserting that Zakocs does not have a potential conflict as defined by Oregon law, and noting that her contract does not ask her to make "a decision or recommendation, nor to take any action regarding proposed transactions." 

Proposal would create dominant hospital and clinic system

Oregon Health & Science University’s proposed takeover of Legacy Health would result in a system that controls five out of six hospitals in Multnomah County and seven out of 13 hospitals in the Portland area. It would have a monopoly on certain areas of care. 

Critics have seized on the market dominance of the proposed entity and cited research that suggests market dominance leads to higher cost and may hurt access. Former Oregon Gov. John Kitzhaber has argued the state should bail out Legacy Health rather than risk higher costs and less choice for businesses and health care consumers in Oregon

Leaders of the two systems, however, say the merger will benefit Oregonians and take advantage of the systems' strengths, such as by filling vacant Legacy Health beds and easing wait times at OHSU. Their employees' unions support the deal.

But the OHSU application to the state concedes that, if approved, the merged system would not register a profit for years. And it comes at at a time of significant turmoil for OHSU.

Consultant's work questioned

Zakocs, a former university professor, specializes in public health work. According to a conflict-of-interest form filled out by Zakocs for the state merger review program dated Dec. 3, 2024, she was paid by OHSU to coach staff of the School of Public Health it operates with Portland State University. 

For Santa, reading the slides Zakocs was hired to help prepare for the meetings, they appear slanted toward approving the merger. He doesn't know if that is the result of her influence or simply reflects the board members' input. 

But he questions how Zakocs has handled public input. In early March, the review board held a meeting hearing that included more than an hour of hearing from OHSU and Legacy officials, followed by just a 30-minute hearing for public comment —one that was dominated by animal rights activists who'd signed up to call for an end to primate research conducted by OHSU.

Only 18 of the 28 people who had signed up for testimony at the hearing were allowed to speak. Following the 30-minute meeting,  Zakocs instructed the review board members to vote on whether to hold another public hearing. Three board members said yes, five said no, and two were absent, causing Zakocs to say there would not be another public hearing.

As a result of Zakocs's handling of the hearing, the review board primarily heard from hospital leaders about the mergers' potential effects on costs and care but not from people to counter those concerns. In-person comments are qualitatively different and more persuasive than written comments, Santa observed, and the result was a lopsided picture.

“There were a number of people who I know had very robust comments to make, and they weren't given a chance to do that in public,” Santa said

According to Santa, dismissing the desire of three board members to hold another hearing, and depriving two board members of the opportunity to hear any in-person testimony from opponents, runs counter to the goals of the program, which was set up to allow public input and transparency.

Jacobson, who raised concerns about two of the review board's members, agrees that the process feels flawed. She took an interest in the matter because she opposes primate research conducted at OHSU, a focal point for some critics of the proposed merger.

The attorney commented on the most recent hearing, in which review board members appeared to lean toward recommending approval of the merger despite noting that OHSU and state staff had not fleshed out or agreed upon how to ensure accountability over how the merger would affect care.

Even setting her feelings on primate research aside, “I can not even believe they can vote on this in good conscience, given the lack of information provided and commitments that have not been provided,” Jacobson said in an email.

The board is scheduled to vote on its recommendation April 7 and finalize it one week later. The recommendation is not binding on program staff.