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Tuality, Providence talk of affiliation

For two days last week, rumors were swirling that Tuality Healthcare would be purchased by, or merge with, Portland’s Providence Health & Services.

Last Wednesday afternoon, Tuality announced developing talks surrounding an “affiliation” with Providence.

“This may include opportunities such as integrating specific clinical and administrative services and improving community health access,” wrote Dick Stensen, Tuality’s president and chief executive officer since 1992, in a memo to staff.

The announcement came after the News-Times confirmed that a partnership announcement was imminent and posted the news online.

The details of what an affiliation might mean aren’t yet clear. Tuality’s board of directors isn’t scheduled to meet until its September retreat.

But it wouldn’t be the first time the hospital group entered into an affiliation with another health care provider. The Tuality/OHSU Cancer Center in Hillsboro is an example of what an affiliation can look like.

And it’s not the first time Tuality and Providence have formed an agreement.

Earlier this month, Tuality and Providence announced a separate partnership involving LifeWise Health Plan of Oregon, in which Tuality would serve as the exclusive in-network hospital for LifeWise health insurance customers in western Washington County, where Providence has no hospitals. Providence would in turn be the exclusive in-network hospital for those customers in the rest of the Portland area.

The latest deal is expected to be a further integration of Tuality and Providence, though it’s not entirely clear how that integration could take place, or what it would mean for Tuality Hospital in Hillsboro, or Tuality’s Forest Grove facilities.

What Stenson made very clear, was that a sale is not underway.

“These discussions do not include the sale, transfer of control or governance of Tuality Healthcare to Providence Health & Services,” Stenson wrote. “Tuality Healthcare and Providence Health & Services will remain separate employers, and Tuality will remain an independent hospital.”

Stenson is traveling and unavailable for comment.

Last February rumors began to fly that Portland-based Legacy Health System was ready to buy Tuality.

It turned out those rumors were based on a kernel of truth, as well.

Legacy and Tuality were in talks during the first quarter of 2011 to explore a merger, but the Hillsboro-based hospital group’s board voted to end the conversations, quashing the merger talk.

Hospital industry watchers have long speculated that Legacy and Providence might see Tuality as a useful part of an expansion strategy on either hospital group’s part.

And there’s another player in the westside hospital market: Kaiser Permanente, which will open a new $344 million, 421,000-square-foot hospital in the Tanasbourne area in August of 2013.




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