Marty Cahill has spent the better part of two years talking about survival — the delicate, unglamorous math of keeping a small-town hospital system solvent in an era when the ledgers rarely balance in favor of places like Corvallis. This week, Cahill, the president and CEO of Samaritan Health Services, got the answer he had been waiting for.
Oregon’s health care merger watchdog, OHA’s Health Care Market Oversight program signed off on Samaritan’s proposed absorption into MultiCare Health System, the much larger nonprofit based across the border in Washington state. The approval, issued Monday, came loaded with conditions, but it removed what health care executives across the state consider the single toughest gate in any hospital merger — a review process that has, in other cases, dragged on for years while regulators pick apart what a deal might mean for costs, working conditions, and whether patients can still get care close to home.
It is not, quite yet, a done deal. Two more sign-offs are still pending, both tied to MultiCare’s bid to take over the health insurance plans Samaritan currently runs, including the InterCommunity Health Network, which covers roughly 87,000 members of the Oregon Health Plan. But the larger, more consequential review — the one that determines whether the merger itself can proceed — has cleared.
The path here has been a long one. MultiCare and Samaritan announced their intention to combine last October and filed their formal application with the state in December, kicking off months of behind-the-scenes negotiation over what Samaritan’s executives would be allowed to promise, and what the state would require them to prove.
What the state settled on, in the end, was specific. MultiCare must follow through on a pledge to invest $700 million in Samaritan’s operations, and for at least five years, any profit generated by the newly acquired Oregon facilities has to be funneled back into the communities Samaritan already serves — Benton, Linn and Lincoln counties, largely, plus the outpatient clinics scattered across them.
“This approval is an important step forward for the communities we serve,” Cahill said in a statement, framing the merger less as a retreat than as a rescue — one that would let Samaritan reinvest in its workforce, its buildings, its technology, in ways it says it could no longer manage on its own. Even so, Samaritan officials caution that the deal won’t be finalized until later this year.
According to Oregon health industry watchdog, The Lund Report, not everyone is satisfied with how the state got here. The Oregon Nurses Association, in a statement responding to the approval, argued that a merger of this size — one that will touch health care access for hundreds of thousands of Oregonians — deserved the state’s full, most rigorous review process, the kind regulators chose not to invoke this time. The union said it appreciated the conditions the state did impose, but that appreciation came wrapped in wariness.
The nurses’ statement pointed back to a fight that is still fresh in the region’s memory: less than a year ago, nurses and community members mobilized to preserve family birth services and after-hours surgical care at Samaritan’s hospitals in Lebanon and Lincoln City. “Those wounds are still fresh,” the union said, arguing that only a comprehensive review could guarantee the kind of transparency and public input that patients and providers deserve.
Why a small system agreed to disappear into a bigger one
To understand why Samaritan sought out a partner at all, it helps to look at MultiCare’s footprint. The Washington-based nonprofit already runs more than 300 primary care, urgent care, pediatric, and specialty clinics, along with 13 hospitals scattered across the Pacific Northwest. Oregon, notably, isn’t among the states it currently operates in — apart from a single outpatient cardiology office in Bend. Samaritan would be its first real foothold south of the Columbia River.
Samaritan, by comparison, is a modest operation: five community hospitals, more than 100 physician clinics, upward of 6,000 employees, and its own health insurance plans, all concentrated in a relatively small stretch of the mid-Willamette Valley and central Oregon coast. Its executives have said, in effect, that there was no version of the future in which Samaritan could keep pace on its own — not without a partner large enough to absorb the shocks that have hit hospital systems nationwide: workforce shortages, thin reimbursements from government and commercial insurers, and reserves too shallow to fund the technology and facility upgrades Samaritan says it needs. According to filings with the state, the system has stayed narrowly profitable, avoiding real financial peril, but without much room to invest.
That the review that just concluded exists at all is because of a 2021 state law, one designed to give regulators a formal check on major health care transactions before they reshape the cost, access, or working conditions tied to patient care.
Under the terms the state has now attached to this one, Samaritan will keep its own board. MultiCare must maintain access to the services Samaritan hospitals currently offer for at least five years, publish a summary of its $700 million, decade-long investment plan on Samaritan’s website, and hand each hospital board a more detailed version of that plan. Of that $700 million, regulators are requiring $300 million be earmarked for the first five years alone — split between expanding Good Samaritan Regional Medical Center, growing the clinical workforce, and building new capacity, including six to eight urgent care centers, a new off-campus emergency department near Albany, and one or two ambulatory surgery centers around Corvallis and Albany.
Two hurdles remain
Two reviews remain open: the Oregon Health Authority’s “Form A” process covering coordinated care organizations like InterCommunity Health, still accepting public comment, and a parallel Form A review by the state’s Department of Consumer and Business Services, which oversees Samaritan’s commercial insurance plans. A subcommittee of the state’s Medicaid Advisory Committee recommended approval back in June, with the added requirement that MultiCare publish a public dashboard so communities can track its performance. A spokesperson for the Department of Consumer and Business Services said a decision on the commercial health plans is likely in September; public comment on that review closes September 4.
How a church-run hospital became a five-hospital regional system
Samaritan’s roots reach back further than a hundred years. The system traces its lineage to Corvallis General Hospital, founded in 1913, according to Samaritan’s site, which the Episcopal Church in Western Oregon reorganized as a nonprofit facility in 1948 under the name Samaritan, Inc. — the “Samaritan” that would eventually lend its name to the entire regional network.
Samaritan Health Services itself did not exist as a unified system until 1997, when Samaritan, Inc. merged with Mid-Valley Healthcare, based in Lebanon, on the shared premise that two hospitals working together, under one nonprofit umbrella, could serve their communities more effectively than either could alone — and could keep decisions about local health care in local hands. That founding logic — bigger, but still local — is the same argument Samaritan’s leadership is making today about MultiCare, even as the scale of the deal dwarfs anything the system has previously undertaken.
The network grew steadily in the years that followed: FirstCare Health in Albany joined in 1999, followed by long-term management arrangements with the North Lincoln Health District in Lincoln City in 2001 and the Pacific Communities Health District in Newport in 2002, extending Samaritan’s reach to the central Oregon coast. By the time those additions were complete, Samaritan had become the five-hospital system that exists today, alongside its physician clinics, its insurance plans, and specialty programs like the Samaritan Heart Center and Samaritan Cancer Program — a nearly three-decade arc that has now brought the system to the threshold of its biggest transformation yet.
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