Northwest health care giant Providence Health announced Tuesday it is spinning off its home health division.
Providence Willamette Falls Medical Center, in Oregon City, Ore., Aug. 2, 2023.
Kristyna Wentz-Graff / OPB
Providence’s home health, hospice and community palliative care programs will become part of a joint venture with Compassus, a for-profit company.
Providence announced the news in a post on its website Tuesday.
The Tennessee-based company provides home health, home infusion and hospice care in 30 states across the East Coast, Midwest and South.
It doesn’t currently operate in the Pacific Northwest, where Providence holds a significant share of the market. Providence operates in seven states: Washington, Montana, Oregon, California, New Mexico, Texas and Alaska.
Providence notified the Oregon Nurses Association (ONA) of the transaction in an email on Tuesday. ONA represents nurses and many professional staff employed by Providence’s home health division.
The deal will allow Providence to take advantage of Compassus’ experience delivering home health care, wrote Jaquie Lupro, a spokesperson on behalf of Providence to ONA.
“Compassus already has infrastructure and technology ― electronic medical record, mobile devices, predictive analytics, and billing systems ― specifically designed for these in-home care services,” Lupro wrote.
The joint venture is expected to begin operations in early 2025, Lupro said. Providence’s home health employees will likely, after a transition period, become employees of Compassus.
The joint venture will need approval by regulators in Oregon.
The Oregon Health Authority reviews all major health care transactions, including joint ventures, and can impose conditions on deals it finds will have a negative impact on access to affordable health care.
In 2019, Compassus was jointly purchased by the private equity firm TowerBrook Capital Partners and the health system Ascension Health, according to news reports.
Democratic lawmakers tried, in the last session, to adopt even more stringent requirements for health care transactions in Oregon, citing concern that private equity investments can diminish local control over health care. Republicans successfully blocked that legislation, arguing it would have stifled innovation and investment.
Providence, which has nonprofit status, has received tax breaks from the state of Oregon in exchange for providing charity care and other community benefits.
Providence’s home health, hospice and palliative care at home programs serve about 30,000 patients each day across its service area.
“The demand for these services continues to increase in the markets we serve, creating opportunities for continued growth, innovation, and investment,” the company wrote in its most recent financial filing.
The company said its union representation in the field will remain and Compassus will take over bargaining future contracts.