Oregon Health & Sciences University and Legacy Health have called off their controversial proposed merger.

The two large health systems announced their intention to merge in August 2023, in large part because Legacy Health was facing serious financial problems that could be eased by merging with OHSU. An Oregon Health Advisory Committee recommended against the merger in April of this year, saying it would reduce competition and increase health care costs.

The two organizations released the following statement on Monday, May 5:

“In August 2023, Oregon Health & Science University and Legacy Health announced their intent to combine and create an integrated health system. Today, the organizations have entered into a mutual agreement to terminate the transaction. After careful consideration of the evolving operating environment, the organizations have determined that the best way to meet the needs of the communities they serve is to move forward as individual organizations. OHSU and Legacy will remain focused on each health system’s individual strategic objectives, with the goal of remaining well-positioned to continue supporting their people, patients and communities. OHSU and Legacy Health will continue to promote the health and well-being of people in Oregon, Southwest Washington and beyond.”

The advisory committee consisted of six community members connected to the healthcare industry. The Oregon’s Health Care Market Oversight program was still reviewing the proposed merger when the announcement was made.

Last week, OHSU announced its nine-month financial results, which included an operating loss of about $71 million, undermining its previous claims of financial stability.

The merger would have combined more than 32,000 employees and 100 locations, mostly in the Portland area. OHSU had committed $1 billion to expand services for the joint system.

Some labor organizations supported the merger. In response to the announcement, the Oregon Nurses Association said:

“In the fall of 2023, OHSU and Legacy announced they intended to merge into Oregon’s largest healthcare system. The Oregon Nurses Association (ONA) and our partners in labor supported the deal because, ultimately, we believed it would lead to better working conditions for frontline caregivers and high standards for patient care.

“This morning, we learned that OHSU and Legacy have mutually agreed to end their deal to merge. While we are disappointed with their decision to terminate the deal, this will not impact ONA’s ongoing work to organize frontline caregivers and fight for fair contracts that prioritize workers and patients over profits.”

This story will be updated when more information is available.