Legacy Health Navigates Union Challenges After OHSU’s Unsuccessful Attempt: What It Means for the Future

Oregon Health & Science University (OHSU) aimed to acquire Legacy Health, but the deal collapsed on May 5 after nearly two years of negotiations. This setback has left many questioning the implications for the healthcare landscape in Oregon.

While OHSU may have lost a significant opportunity, some parties have emerged relatively unscathed. Lawyers from the Washington, D.C.-based firm Hogan Lovells, who guided OHSU through this process, will still be compensated regardless of the deal’s outcome. Legacy Health’s executives, such as COO Jonathan Avery, who earned a substantial $1.4 million last fiscal year, will continue to retain their positions.

Interestingly, the fallout may not all be negative for workers. The Oregon Nurses Association, among other unions, saw a surge in membership as uncertainties about the merger grew. Before the announcement, only about 1,400 out of 14,000 Legacy employees were unionized. Now, that number has jumped to around 5,350, representing 38% of the workforce. The Oregon Nurses Association has seen its own membership rise from 400 to 3,300—an impressive 725% increase since the merger discussions began.

Historically, mergers in the healthcare sector often aim to cut costs, but ironically, this situation could lead to increased labor costs, particularly at Legacy, as more workers seek union representation. Recent data from the Department for Professional Employees shows that new contracts for organized nurses at various facilities included significant salary increases. For example, nurses at Central Vermont Medical Center saw 21.5% raises over their contract period.

According to Becker’s Hospital Review, Oregon boasts some of the highest-paid nurses in the country, contributing to financial strain on local hospitals. Reports from the Hospital Association of Oregon indicate that, in 2023, hospitals had an average profit margin of just 0.94%, a stark contrast to the national average of 5.2%. The pressures surrounding labor costs may tie back to Legacy’s original motivations to partner with OHSU.

As OHSU previously pledged $1 billion to refresh Legacy’s facilities, some employees feared layoffs amid redundancy. David Kreisman from AFSCME emphasized that employees were anxious about their job security, which led many to seek protection through unions.

Despite the failed merger, union membership continues to thrive. Labor experts note that “even in challenging times, people are turning to unions for support.” Dr. John Santa, a health policy expert, pointed out that unions played their hand early in the bargaining process, potentially losing some leverage. However, OHSU’s commitment to protect unionized roles for a year and invest in worker training reflected a strategic intent to win labor support for potential mergers.

While the merger is off the table, the drive for union representation remains strong among healthcare workers in Oregon, reflecting a growing trend toward collective bargaining for better conditions in the complex world of healthcare.

For more details on labor unions and healthcare trends, explore resources such as the AFL-CIO and Becker’s Hospital Review.



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