Providence Health, Oregon’s biggest provider of home health and hospice services, wants to put a private equity-backed company in charge of those operations. But the plan could negatively affect the care of thousands of Oregonians, according to a new state report.
The program that reviews large health care mergers and other deals has launched a six-month review of Providence’s proposed transaction with Tennessee-based Compassus and issued an initial report that analyzed the potential effects. Compassus is partly owned by private equity firm TowerBrook Capital Partners, L.P.
“To the extent providing better care to community members conflicts with profit objectives, for-profit owners would be expected to prioritize the latter,” according to the 29-page state report, which added that a profit-based focus could affect services offered, patient care, admissions and discharges as well as staffing levels and employee compensation.
Under the new 180-day review, the state will conduct a more in-depth evaluation of the deal and its potential effects on costs, care quality, access and workplace conditions. That’s in keeping with the 2021 law creating the program, which is considered the nation’s toughest.
The review follows concerns raised by the Oregon Nurses Association and its members, some of whom say they are alarmed by reports that Compassus pays based on number of patient visits rather than an hourly rate, with which nurses say they have more time to provide proper care.
Providence is the state’s largest provider
Providence’s home health and community care unit serves 38,000 Oregonians in their homes and facilities, including palliative care, home infusions, assisted living and skilled nursing. The care is provided in 19 counties.
In terms of just home health, the system provided about 25% of home health services offered in the state, to about 12,000 people, according to regulators’ analysis of 2023 claims data. The next largest home health provider accounted for little more than half that figure.
For home hospice, Providence accounted for approximately 13% of services offered in the state, providing care for 2,500 people in 2023.
Providence’s 10 home health care offices are located in Astoria, Medford, Newberg and the Portland and Salem areas. It operates six hospice locations located in Medford, Hood River, Newberg and the Portland area.
But Providence has been struggling in recent years, struggles likely to worsen due to the Trump administration’s trade policies, according to a recent article in The Oregonian/OregonLive. Despite its dominant position, Providence is finding it “increasingly challenging” to manage services while keeping quality high amid a “rapidly advancing and increasingly competitive industry,” according to an earlier regulatory filing.
Providence Oregon is part of Providence St. Joseph Health, a multistate system headquartered in Renton, Washington. Last year it announced a joint venture with Compassus that would also cover its home and hospice operations in Alaska, California, Texas and Washington.
In their April 18 analysis, state health officials cited studies indicating that for-profit operators of hospices perform worse than nonprofits. The studies found evidence that for-profit companies employed fewer clinicians and were more likely to be accused of providing worse care while increasing costs.
The report found more limited evidence that for-profit home health agencies were more responsive to patients than non-profits, but fared worse on long-term outcomes.
Citing the available research, regulators wrote that, “this ownership change may have significant effects on care quality, access, cost, and health equity for people needing home hospice or home health care. Additional review and analysis of the proposed transaction is needed to assess the nature and likelihood of such effects.”
A Providence spokesperson told The Lund Report in an email that Compassus is “a like-minded operator” and the deal will increase access to care.
“An important part of the proposed joint venture is our shared commitment and focus on caring for the poor and vulnerable,” the spokesperson wrote. “We’ll continue to care for those who may live at the margin and we’ll do it with integrity and excellence that’s reflective of who we are today and who we’re going to be in the future.”
The majority of public comments submitted on the deal oppose it, with many using nearly identical language.
The only person expressing support in the most recent round of comments did so anonymously, saying that “if this hospital system wants to make a business move with another company they should be free to do so.”
Many commenters argued that the new operator of Providence’s home and hospice services will prioritize returns on investments over patient care.
“I am concerned about the impact on my patients and the ethics of profit-driven care,” Barbara Sutton, a home-based primary care provider, wrote, adding patients need individualized personal care, whereas private equity control means “that care is limited in a cookie cutter fashion regardless of patient needs,” she wrote.
State officials expect to complete their review of the deal this fall. State health officials would then either approve the deal, reject it or approve it with conditions.
