Providence, Kadlec Health team up for cost control, better services

Providence Health & Services, the region’s largest private employer and medical provider, has formed an affiliation with Kadlec Health System, based in the Tri-Cities.

The goal, said officials from both groups, is to control rising health care costs and provide improved services for the growing population of southeast Washington and northeast Oregon. Kadlec Health is the largest provider of primary and specialty medical care to more than 350,000 residents.

Kadlec will retain its name. Operations of Kadlec Medical Center, in Richland, and its regional clinics will be managed by Western HealthConnect, an entity Providence created to form partnerships with nonreligious medical providers.

The affiliation is not driven by immediate economic necessity, said Susan Kreid, chairwoman of Kadlec’s board of directors. The Kadlec board will be renamed the Kadlec Regional Medical Center Community Board, and it will share control of Kadlec’s operations with Western HealthConnect.

“We at Kadlec are doing very well at the moment. We are very strong,” Kreid said.

But she said the board foresees the need to join forces with a much larger provider to ride out forthcoming disruptions in how insurance companies pay for medical services.

Both medical groups retain their identities – Kadlec as a secular operation and Providence as a faith-based medical service provider.

Kreid added, “The affiliation allows us to preserve our identity, to preserve our strengths and share Providence’s strengths.”

The arrangement is not a merger, said Joel Gilbertson, senior vice president of community partnerships and external affairs at Providence.

“There is no purchase or sale,” he said.

Gilbertson and Kreid said on Tuesday that medical systems face ongoing consolidation and streamlining. Kadlec and Providence are combining forces to emphasize each group’s strengths and eliminate redundancies, Kreid said.

While the new arrangement expands Kadlec’s care options, the affiliation also gives Providence its first direct entry into the growing Tri-Cities community, said Gilbertson.

Two years ago, Providence Health made a similar arrangement with Seattle-based Swedish Health Services. Providence’s strong credit rating and its ability to standardize the equipment used by Swedish’s facilities have led to savings estimated at $240 million, Gilbertson said.

Also this year, Seattle-based Pacific Medical Centers agreed to enter a secular affiliation with Providence Health, transferring its operations to Western HealthConnect, the same entity being used by Providence to manage both Swedish Health and Kadlec.

Kadlec’s patients, primarily in Eastern Washington and parts of Eastern Oregon, will see no immediate impact in how they access services, said Lane Savitch, president of Kadlec Medical Center.

The next step is for Kadlec and Providence to start a “collaborative planning process,” Gilbertson said. Changes or expansions will be “thoughtful and deliberate,” he added.

While Kadlec doctors don’t currently offer abortions, they will continue to refer patients seeking those procedures to outside providers, a Kadlec Health spokesman noted.

Providence Health, a Catholic health organization, does not allow doctors to perform elective abortions, although it allows the procedure when the life of the mother is at risk.