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Parent organization of Tacoma’s Franciscan Health System announces plans to create new regional health system with Oregon’s PeaceHealth

Post by Kathleen Cooper / The News Tribune on Aug. 17, 2012 at 1:59 pm with No Comments »
August 17, 2012 2:45 pm

Tacoma-based Franciscan Health System might be getting a new layer of corporate management.

Denver-based Catholic Health Initiatives, Franciscan’s parent organization, announced today it plans to form a new health system to serve the Pacific Northwest by partnering with Vancouver, Wash.-based PeaceHealth.

Patients of Franciscan Health System will see no changes for quite awhile. The two parent organizations signed a non-binding letter of intent and expect to form the new system before June 30 of next year, according to a news release.

Discussions to form the new system “were prompted by a rapidly changing health care environment” that “demands the ability to accept more financial risk in caring for defined populations, such as Medicaid recipients.”

A larger system can have economies of scale, from purchasing power on services to back-office work such as information technology systems.

CHI operates seven hospitals in Washington and Oregon, including those owned by Franciscan.

PeaceHealth operates four hospitals in Washington: St. Joseph Medical Center in Bellingham; St. John Medical Center in Longview and Southwest Medical Center in Vancouver. Peace Island Medical Center in Friday Harbor is scheduled to open in November.

The new organization will include nearly 26,000 employees and about 950 employed physicians, according to the release. It will have annual revenues of almost $4 billion.

“As a part of Catholic Health Initiatives, we believe this partnership will expand and sustain our healing ministry that has been essential to the quality of life in our South Puget Sound communities since 1891,” said Joe Wilczek, Franciscan’s CEO said in the release. “This is exciting news for the Franciscan organization and the communities we serve.”

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