Process pushes potential Ashland hospital merger with Asante into 2013

Aproposed merger between Asante and the cash-strapped Ashland Community Hospital won't take place before the end of this year as hospital officials had hoped,.

A merger, however, could ensure the Ashland hospital's long-term financial health, ACH Board of Directors Chairman Doug Gentry told Ashland City Council members Tuesday night.

"For the community, the clock is ticking, but I need to be realistic that it's not going to happen before the end of the year," Gentry said.

Asante has emerged as the leading potential partner for ACH after San Francisco-based Dignity Health pulled out of negotiations in October, citing issues such as community opposition.

Asante will spend a minimum of 60 days thoroughly researching ACH and its finances. As part of a merger, Asante would take over control of ACH's assets as well as its debts, Gentry said.

Following that 60-day process, the ACH Board of Directors will return to the council and the community for comments, he said.

Asante would need to negotiate wih the city of Ashland, which owns ACH property, buildings, improvements and fixed equipment. The Ashland City Council would need to approve a merger.

In decades past, ACH was a city department before being spun off as an independent entity.

Gentry said Asante, which has reserves of almost a half a billion dollars, could strengthen ACH in a number of ways.

It has capital that it could invest in ACH, and Asante could boost use of the Ashland hospital's operating rooms, which aren't used to full capacity.

Asante and Providence Medford Medical Center operating rooms are at full capacity and using Ashland's facilities could be cheaper for them than building new facilities, Gentry said.

Asante's hospitals are the Rogue Regional Medical Center in Medford and the Three Rivers Medical Center in Grants Pass.

Gentry said Asante also loves ACH's wound-care center, which has two state-of-the-art chambers that provide extra oxygen to speed healing.

Gentry said ACH could lose some employees as it looks for greater efficiencies as part of the merger.

ACH would work hard to preserve as many local jobs as possible and to reassign employees to other jobs, but can't guarantee that there would be no job losses, he said.

"We're going to have to walk through a potentially painful part of it as we find savings," he said.

Gentry said the ACH board shares the community's desire to maintain a 24-hour emergency room.

Ashland's hospital lost $3.3 million last fiscal year primarily because Medicare doesn't pay enough to cover the amount the hospital bills to treat senior citizens.

The hospital also lost money because of Medicaid patients, charity care and other unpaid medical bills.

With 400 employees, ACH is Ashland's third-largest employer and has the highest average wage, according to data provided by ACH.

Many community members raised concerns about an ACH merger with Dignity Health because of that health care chain's restrictions on abortion and assisted-suicide prescriptions allowed under Oregon's Death with Dignity Act.

Those issues are not a concern with Asante, according to Gentry.

Seattle-based Providence Health & Services also submitted a proposal regarding ACH, but it was a plan to manage ACH, not merge with it. That deal would not have resolved ACH's debt issues, Gentry said.

While negotiations with Asante are continuing, Asante has agreed to provide consultants to help ACH examine its finances and operations, he said.

Councilman Dennis Slattery said the ACH Board of Directors is doing an excellent job in representing community interests as the negotiations proceed.

"You should all be thanked for the time you have spent on this," Slattery told Gentry.

The ACH board could potentially become a local advisory board after a merger, Gentry said.

Vickie Aldous is a reporter for the Ashland Daily Tidings. She can be reached at 541-479-8199 or

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