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Originally published February 3, 2014 at 10:15 AM | Page modified February 3, 2014 at 6:21 PM

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PacMed agrees to ‘secular affiliation’ with Providence

The medical-clinic operator plans to shift its corporate structure into a nonreligious entity run by the giant Catholic health-care system.

Seattle Times business reporter

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Pacific Medical Centers has agreed to enter a so-called “secular affiliation” with Providence Health & Services, the giant Catholic health-care system.

The proposed agreement, announced Monday, calls for the Pacific Hospital Preservation & Development Authority, PacMed’s sole corporate member, to transfer that membership to Western HealthConnect.

That’s the entity set up by Providence to expand its operations, while allowing health companies that fall under its umbrella to continue providing some services the Catholic health-care system does not, such as contraceptives and sterilizations. Providence calls Western HealthConnect a secular organization, but it precludes affiliates from performing elective abortions, which have not been part of PacMed’s practice.

The companies did not disclose the financial terms of the transaction.

Providence spokeswoman Colleen Wadden said the deal would not require regulatory approval because “no hospital license is involved in this transaction and the affiliation will not adversely affect competition.”

And while the companies would share administrative services, Wadden said Providence doesn’t anticipate any layoffs. PacMed has nearly 800 employees.

In a news release, PacMed Chief Executive Harvey Smith said the company needed to join Providence to reduce costs for patients, employers and insurers while improving the quality of its care.

“On its own, PacMed cannot drive broad changes in the way that health care is delivered,” Smith said. “We need to collaborate with an organization that has sufficient resources and a similar community-minded mission and vision to succeed.”

PacMed, with its nine Seattle-area locations and 150 primary- and specialty-care providers, joins Renton-based Providence, which has 32 hospitals and 400 physician clinics. The health system employs more than 64,000 people in five states.

“Together, we can affect change on a much larger scale by sharing best practice and innovating collaboratively, not only in the Puget Sound region, but across the Providence system,” Providence Chief Executive Rod Hochman said.

Two years ago, Providence entered into a similar secular affiliation with Swedish Health Services as it expanded its footprint in the Seattle area. While the affiliation was secular, Swedish decided to stop performing elective abortions “out of respect for the affiliation,” a spokesman said at the time.

Instead, Swedish helped underwrite a Planned Parenthood center adjacent to the hospital, where it refers patients.

Like the Swedish deal, the PacMed arrangement is an affiliation rather than an acquisition, allowing PacMed to operate independent of the religious doctrine that guides Providence’s health care.

“The intention is not for affiliates to become Catholic,” Providence’s Wadden said. “The intention is for us to work together.”

Even though Western HealthConnect precludes the physicians of its affiliates from performing elective abortions, the companies said PacMed doctors and staff would not be subject to the Ethical and Religious Directives for Catholic Health Care Services, the U.S. Conference of Catholic Bishops rules that dictate the care that Catholic health systems can provide.

“The reproductive-health services PacMed offers will not change and PacMed patients will have the same access to the services that they currently receive,” the companies said in their news release. “PacMed will continue to prescribe contraceptives and its physicians will continue to perform sterilizations and other procedures consistent with current practice.”

Because PacMed does not perform elective abortions, Western HealthConnect did not need to require it to stop the procedures. Under the terms of the affiliation agreement, PacMed doctors would be allowed to continue referring patients seeking elective abortions to other providers.

The companies said PacMed doctors also would have no restrictions on conversations with patients about options available under Washington state’s Death with Dignity Act.

Physicians at PacMed, who currently do not prescribe lethal medications, would be allowed to continue as consulting physicians for patients choosing physician-assisted death, but not as the main doctor involved.

PacMed began as a U.S. Public Health Service hospital on Beacon Hill overlooking downtown Seattle in 1933. It expanded in the 1980s, adding outpatient clinics in the Seattle area, and it launched a health-maintenance organization (HMO).

In 1987, it closed the hospital to focus on its HMO. But eight years later, it sold the HMO to focus on its outpatient clinics. In 2003, PacMed shifted from a city-affiliated public development authority to a private, not-for-profit organization.

The Pacific Hospital Preservation & Development Authority retained rights to approve transactions of this type when it restructured in 2003.

Providence isn’t the only religious health-care system expanding through affiliations with secular providers in the region. Last May, UW Medicine and PeaceHealth, a not-for-profit system based in Clark County and founded by the Sisters of St. Joseph of Peace, announced a “strategic affiliation.”

Jay Greene: 206-464-2231 or Twitter: iamjaygreene

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