Oregon’s largest health insurer, local lawmakers, hospital employees and several patients weighed in this month on whether the state should allow Salem Health to buy Santiam Hospital. During a two-week public comment period, state health officials received nearly 300 comments about an urgent fi ling made by Salem Health and Santiam Hospital Clinics on July 3. The request for emergency exemption from review asked officials to greenlight the merger by Aug. 1.  In their request, hospital leaders said Santiam’s finances had turned the deal – which had been under review since April – into an “acute emergency.” Without the early approval, they said, with fewer than 30 days of cash on hand, Santiam will be insolvent by September.. The public comment period for the request ended Friday, July 24. Among those who weighed in was Regence BlueCross BlueShield, a health insurer that has been out-of-network at Salem Health since last year following heated contract negotiations. The company, who said the hospitals’ request is riddled with misleading claims, asked authorities to shut it down and resume their review. On the other side, several state senators and representatives urged that the deal go through. The Oregon Health Authority oversees business transactions between hospitals through its Health Care Oversight Committee. This is the second-ever emergency exemption request it has received, and the only one it has seen from two hospitals. It can grant an exemption when there is a situation that immediately threatens healthcare services, a need to keep a facility solvent and an urgent need to protect consumers.  But even if state health officials give the go-ahead by Aug. 1, the hospitals will likely have to wait on final approval from the Oregon Department of Justice. The department will have a public meeting on Aug. 5 to hear public feedback on the deal. Within 10 days of that hearing, the final decision will be on the desk of Oregon Attorney General Dan Rayfield. Lawmakers weigh in In a bipartisan letter, seven local lawmakers, representing parts of Salem, Portland, Keizer and the Santiam Canyon, shared strong support for the deal and urged the Oregon Health Authority to grant the emergency request.  The letter was signed by state representatives Kevin Mannix, Tom Andersen, Rob Nosse, Hai Pham and Ed Diehl – who sits on Santiam’s Board of Directors. State senators Fred Girod and Kim Thatcher also signed it. “The proposed affiliation with Salem Health represents a thoughtful, locally focused solution that preserves healthcare services in our region,” the letter said. “Unlike many healthcare mergers involving out-of-state organizations or private equity ownership, this affiliation keeps healthcare decisions rooted in the Mid-Willamette Valley while preserving Santiam’s local identity and commitment to community-based care.” Santiam Hospital Clinics, based in Stayton, operates one of three hospitals in Marion County along with 13 clinics. The health system serves about 60,000 patients each year, with the majority living in the rural Santiam Canyon, which includes towns such as Lyons, Gates, Idanha and Mill City. Almost a quarter of its patient base comes from Salem.  With insolvency on the horizon, Santiam leaders said that without Aug. 1 approval, they would have to soon begin weighing millions of dollars in cuts to help keep its doors open. Those could include layoffs, wage cuts and reductions to maternity and intensive care departments, according to the request.  “Residents of the Santiam Canyon and surrounding communities deserve reliable access to emergency care, surgical services, primary care, maternity care and specialty services close to home,” lawmakers said in the letter. “If Santiam’s financial condition continues to deteriorate while regulatory review is prolonged, patients—not institutions—will bear the consequences.” The letter pointed to Salem Health’s intended investment of $61 million into Santiam, which the hospitals say would help pay off Santiam’s debt, grow its infrastructure and fund a new electronic health records system they say is urgently needed.  The contract for Santiam’s current health record system is due to expire in June 2027, meaning it needs to begin the transition to the new system by September, hospital leaders said. The new system, however, comes with a hefty, multi-million dollar price tag – something Santiam says it can’t afford on its own.  Moreover, a hospital cannot operate without a system for patient records. Regence opposes the move Regence is Oregon’s largest health insurance, covering nearly a million people across the state and about 20,000 in Marion and Polk counties.  Regence leaders want the state to shut down the new emergency exemption request and resume its comprehensive review, according to a July 24 letter. That longer review was underway until the emergency request came down. This is the second time Regence has publicly commented on the deal, following an April letter that asked state health officials to do a comprehensive review and ultimately ax the deal altogether. In the recent letter, Regence said that Santiam’s situation does not meet the criteria for emergency exemption. They counter many of the claims made in the hospitals’ request, arguing that Santiam is financially stable, the deal would harm patients and the urgency over the electronic health system is “manufactured.” “The parties claim they ‘must’ transition by September 2026 due to an electronic health records conversion. This urgency is manufactured by the proposed merger itself,” Regence officials say. “If the merger does not proceed, Santiam Hospital could likely continue with their current (electronic health record) vendor or proceed with an alternative one.” Hospital officials previously told state health officials and Salem Reporter that the new health record system would cost $4 million. They’re now saying it will cost $12 million. The health authority asked the hospitals to explain the discrepancy in a recent inquiry. In response, hospital officials said the earlier amount did not include the costs of implementing the new system, including staffing, consultants and “non-capital infrastructure expenses.” The full cost breakdown for the new system is redacted from the publicly-available request.  Regence says the urgency over Santiam’s projected cash-on-hand is unfounded. “Among Oregon’s 59 hospitals, 38 have less than 30 days cash-on-hand—none are seeking emergency mergers,” Regence said. Regence cites that Santiam has seen positive operating margins in recent years, with numbers from early 2026 showing it has over $19 million in cash-on-hand.  They say the deal would harm patients by increasing the cost of care, expanding Salem Health’s reach in the local healthcare market and putting Regence patients at risk of losing access to Santiam.  “The emergency exemption statute was designed for genuine crises where immediate action is necessary to preserve health care services. This is not that situation,” Regence said. “Santiam Hospital is profitable, stable and capable of independent operation. The proposed merger serves Salem Health’s strategic interest in market dominance, not consumers’ interest in affordable, accessible care.” Mixed responses from patients  Some patients who submitted comments were in favor of the requested early approval to help stabilize healthcare in the canyon, while others had concerns over Regence coverage and consolidation by Salem Health. Stayton resident Donna Romandia and her family have received care at Santiam on multiple occasions. She shared support for the deal and expressed concerns over what Santiam closing could mean for her community. “For generations, Santiam Hospital has been a trusted source of care for residents of Stayton, the Santiam Canyon and surrounding rural communities. Families have depended on it in emergencies, for childbirth, for life-saving treatment and for comfort during some of life’s hardest moments,” Romandia wrote.  Without Santiam, canyon residents would have to travel further to get emergency care for serious health events like a heart attack or traumatic injury. The closest emergency departments other than Santiam are about a 20-minutes drive from Stayton, or a 30-minute drive from Lyons. “The people of the Santiam Canyon are resilient, but they should not have to live without a local hospital,” she said.  Bill Randall, president of a local union – the Association of Western Pulp and Paper Workers Local 396 – asked the health authority to deny the emergency exemption request.  Randall represents over 100 local industrial workers who are insured through Regence. He is worried the acquisition could mean his members lose access to another nearby hospital. Since the breakdown between Salem Health and Regence, many Regence patients say they’ve switched to Santiam. Regence is in-network at Santiam until at least June 2027.  “Salem Health already holds a monopoly of healthcare in the region,” Randall wrote. “I was kicked out of the doctor’s office I’d been going to for 30 years when Salem health stopped taking (Regence). This merger will have the same effect for the many employees I represent that utilize Santiam Hospital now that we are not allowed at Salem Health facilities.” Regence patients can still use the Salem Hospital emergency room as federal law protects people from paying out-of-network prices for emergency care. Despite this, Randall says members will drive to Stayton, Corvallis or Silverton in an emergency in case they need to be admitted. While Salem Health assured it won’t terminate any of Santiam’s existing insurance agreements upon closing, Randall said it’s “little comfort.” “It would just be a matter of time,” he said. Hospital staff weigh in Employees from both hospitals wrote Oregon Health Authority leaders asking them to grant the emergency request.   Parker Demig, a critical care technician at Salem Hospital whose wife also works at Santiam, wrote in support of the deal.  “From my perspective, this merger is about making sure Santiam Hospital has the support it needs to continue serving our community,” Demig said. “If the hospital is struggling financially, waiting through a long approval process could put important services at risk. That could mean longer drives for emergency care and fewer local healthcare options for families in the Santiam Canyon and surrounding areas.” “I hope the emergency exemption is approved so the two organizations can move forward with providing stability, protecting local health care services and supporting the employees who care for patients every day,” he said. One Santiam employee felt differently. “I strongly believe a merger between Santiam and Salem is and will be the most devastating thing for patients in the area,” wrote Konnor Severson, who said he’s been a lead paramedic at Santiam for three years. “I believe allowing these two entities to merge would cause the greatest monopolization of healthcare in the Willamette Valley ever, and thousands of patients and providers will be the only ones experiencing these issues on the frontlines while these businesses pad their pockets,” he said. Contact reporter Hailey Cook: [email protected] . “My go-to source every morning for accurate, local news.” Make Salem Reporter your trusted source for independent local reporting – every day. Stay informed and connected. Subscribe today. The post Salem Health-Santiam emergency merger request draws mixed feedback from Regence, lawmakers and patients appeared first on Salem Reporter. ...read more read less