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Providence Health System

Providence Health System


506 2nd Avenue, Suite 1200
Seattle, Washington 98104-2329
U.S.A.
Telephone: (206) 464-3355
Fax: (206) 464-3038
Web site: http://www.providence.org

Not-for-Profit Company
Incorporated:
1859
Employees: 45,220
Total Assets: $1.6 billion (2006)
NAIC: 622110 General Medical and Surgical Hospitals; 621110 Offices of Physicians; 621511 Medical Laboratories; 621610 Home Health Care Services; 623110 Nursing Care Facilities; 623310 Community Care Facilities for the Elderly; 624120 Services for the Elderly and Persons with Disabilities

Providence Health System is a major nonprofit provider of healthcare services in the northwestern United States. Established by the order of the Sisters of Providence, the organization's reach spans across Alaska, California (through a cosponsorship with the Little Company of Mary), Montana, Oregon, and Washington. From its headquarters in Seattle, Washington, Providence operates 26 hospitals, numerous physician offices and clinics, and approximately 35 nonacute facilities. In addition to providing medical laboratory, infusion, pharmacy, and home health services, the organization operates adult day care centers, retirement communities, and assisted living centers. Providence also runs the University of Great Falls in Great Falls, Montana, as well as Providence High School in Burbank, California.

19TH-CENTURY ORIGINS: 184399

According to a historical timeline on Providence Health System's web site, which documents the establishment of its ministries and facilities, the organization's roots can be traced back to mid-19th-century Montreal, Quebec, where Mother Emilie Gamelin established the Sisters of Providence religious community on March 25, 1843. Within 15 years the sisters had made their way to Vancouver, Washington, where they formed St. Joseph Hospital on June 7, 1858. The northwestern United States' first permanent hospital, this facility was later named Southwest Washington Medical Center.

The sisters' pioneering efforts led to the formation of the Sisters of Charity of the House of Providence. With support from Father Louis Rossi, who tirelessly appealed to members of the territorial government over the course of eight days, this organization was officially incorporated in the Territory of Washington on March 19, 1859.

According to The Good Work, a historical account of the organization's first 125 years, three nuns served as officers of what would one day become one of the Northwest's oldest corporations. In addition to president Sister Joseph of the Sacred Heart, Sister Praxedes of Providence served as vice-president, while Sister Blandine of the Holy Angels was named treasurer.

The sisters' early efforts included the formation of a hospital for the mentally ill in Vancouver in 1861. By April 1873, St. Patrick Hospital in Missoula, Montana, was formed. This was followed by the development of Oregon's first permanent hospital, when Portland-based St. Vincent Hospital was established in July 1875.

Four hospitals opened their doors during the following decade, beginning with St. Mary Hospital (Walla Walla, Washington) in 1880. Sacred Heart Hospital (Spokane, Washington) followed in 1886, along with the sisters' first western Canadian facility, St. Mary Hospital in New Westminster, British Columbia. Expansion during the 1880s culminated with the opening of St. Peter Hospital (Olympia, Washington) in 1887.

An important development occurred on the organizational front when the sisters formed seven administrative provinces on March 29, 1891. Of these, three were located in the western United States. According to the organization, they included Sacred Heart Province (Vancouver), St. Ignatius Province (Missoula), and St. Vincent de Paul Province (Portland).

Rapid growth continued during the early 1890s. St. Elizabeth Hospital, which later became Providence Yakima Medical Center, was formed in 1891. Columbus Hospital, which eventually became Benefis Healthcare, opened the following year in Great Falls, Montana. Finally, Colfax, Washington-based St. Ignatius Hospital, which eventually became known as Whitman Community Hospital, opened its doors in April 1893.

LAYING FOUNDATIONS: 190059

The Sisters of Providence began a new century on a high note when the Vatican granted approval of their constitutions in 1900, bolstering their efforts to develop new ministries. Two years later, a significant loss was felt when Mother Joseph died on January 19, 1902. However, great progress had been made since she and her peers began their efforts. By this time the organization operated eight schools and 17 hospitals, with a territory that included Alaska, California, Idaho, Montana, Oregon, Washington, and western Canada.

Operations continued to grow during the early 1900s, with Providence Hospital (Everett, Washington) opening its doors in 1905 and Sacred Heart Hospital (Medford, Oregon), which later became Providence Medford Medical Center, coming online in 1911.

In addition to expanding geographically, the many facilities formed by the sisters evolved along with the field of medicine. New technology, always at the forefront of the healthcare industry, was as important during these years as it would be during the 21st century. Newer and better equipment, coupled with evolving surgical techniques, breakthrough medications, and staff training methods, enabled more effective healthcare delivery.

Advancements in medical science occurred against the backdrop of standardization, which rose in importance with the formation of the American College of Surgeons (ACOS) in 1913. Within five years of the ACOS' formation, programs were implemented throughout the organization to standardize the operations and practices of Providence hospitals, an effort that became the mission of one nun in particular, Sister John Gabriel.

According to The Good Work, "Sister John Gabriel was a trailblazer for standard practices. After leading the successful movement to accredit all corporation nursing schools, Sister John Gabriel worked to have all hospitals be satisfied with nothing short of full approval. In the 1930s, Sister John Gabriel urged education in management for all hospital supervisors. She wrote courses in administrative techniques, saw that staff by-laws were written, insisted that hospitals improve clinical facilities and encouraged the founding of medical record libraries. Accreditation followed at every Sisters of Providence health facility."

While such changes occurred in the area of provincial administration, during the 1920s the Sisters of Providence also opened homes for the elderly. During this decade the sisters also began providing instruction in various Catholic parochial schools. Their commitment to education resulted in the establishment of the College of Great Falls in 1932. Based in Great Falls, Montana, the institution was later renamed the University of Great Falls. Providence Hospital, Anchorage, which was later renamed Providence Alaska Medical Center, opened its doors in 1938, rounding out progress during the 1930s.

In 1941 the Sisters of Providence established what was, for its time, a truly progressive facility called the St. Peter Claver Interracial Center, which offered cultural programs for Seattle's Asian American and African American populations.

COMPANY PERSPECTIVES


As People of Providence, we reveal God's love for all, especially the poor and vulnerable, through our compassionate service.

The 1940s also saw the establishment of the sisters' last hospitals in the western United States for a period of roughly 40 years. A second Portland institution named Providence Hospital opened its doors in 1941, followed by Burbank, California-based St. Joseph Hospital (which later became Providence St. Joseph Medical Center) the following year. A final highlight during the 1940s came when the religious community celebrated its 100th anniversary.

Throughout the 1950s, the Sisters of Providence continued to carry out their work meeting community needs through schools, hospitals, and other institutions. Midway through the decade, their commitment to education was reflected in the establishment of Burbank, California-based Providence High School in 1955. The following year they celebrated another special milestonethe centennial of the arrival of the Sisters of Providence in the western United States.

MODERNIZATION: 196089

During the first half of the 1960s, the sisters were affected by various administrative changes within their organization, as well as the Vatican's influence. Specifically, as part of its efforts to reinvigorate the Roman Catholic Church, the Second Vatican Council called for changes that affected everything from the sisters' religious lives to the manner of their dress.

In 1967, the sisters transferred ownership of Vancouver-based St. Joseph Hospital to a community group. Citing an inability to pay for needed renovations, they relinquished ownership of St. Joseph Hospital, Fair-banks, the following year.

The late 1960s were pivotal for the sisters because laypeople (individuals from outside the ordained or cloistered religious community) were brought into the organization to serve in leadership roles. Starting with William Connolly, who was hired to serve as administrator of Providence Hospital, Portland, on November 20, 1969, the sisters would begin relying on lay executives more and more in the coming decades. At the corporate level, Jack Brown was the first director of healthcare operations from the lay community. He was named executive vice-president in 1973, and was promoted to president in September 1979.

Just as modernization created a need for outside executive leadership, it also resulted in corporate structural changes. These were summarized in The Good Work in this way: "In June 1970, the institutions of the Sisters of Providence of St. Ignatius Province were spun off from the original corporation to become the Sisters of Providence of Eastern Washington, and the corporations of Sacred Heart Medical Center and St. Mary Community Hospital. In the same year, the Sisters of Providence-Pariseau Association was established to recognize the nonprofit corporation status of the Sisters of Providence Religious Community, establishing for the first time assets distinct from those of the 1859 corporation."

Noting changes that followed two years later, The Good Work 's account continues: "On March 29, 1972, the Sisters of Providence of Sacred Heart Province adopted amended articles of incorporation to change the corporate title, 'The Sisters of Charity of the House of Providence in the Territory (now State) of Washington' to 'The Sisters of Providence in Washington.' Also in 1972, the names of the Oregon and California corporations were changed to 'The Sisters of Providence in Oregon,' and 'The Sisters of Providence in California.'"

KEY DATES


1843:
Mother Emilie Gamelin establishes the Sisters of Providence religious community.
1858:
The sisters make their way to Vancouver, Wash., where they form St. Joseph Hospital, the northwestern United States' first permanent hospital.
1859:
The Sisters of Charity of the House of Providence is incorporated in the Territory of Washington.
1943:
The Sisters of Providence religious community celebrates its 100th anniversary.
1960s:
Laypeople begin serving the organization in leadership roles.
1993:
The name Sisters of Providence Health System is adopted.
1999:
The organization's name is shortened to Providence Health System.
2005:
Providence Health System and Providence Services, both sponsored by the Sisters of Providence, merge into one organization.
2006:
The sisters celebrate the 150th anniversary of their arrival in the northwestern United States.

The 1970s also brought changes in the area of hospital operations. The sisters sold Astoria, Oregon-based St. Mary Hospital in April 1970, concluding 90 years of ownership. This was followed by another divestiture, when the ownership of Fort Benton, Montana-based St. Clare Hospital was transferred to Chouteau County in December 1974. The sisters concluded the decade with a collaborative effort that resulted in Portland's St. Vincent Hospital taking over management responsibilities of Newberg Community Hospital in Newberg, Oregon. In addition, Seattle-based Providence Hospitality Housea safe haven for children and women in need of emergency shelteropened its doors in the fall of 1979.

A great deal of activity occurred on the hospital front during the 1980s. Following the Sacred Heart Province's sponsorship of Seaside General Hospital in 1983, the sisters added Toppenish, Washington-based Central Memorial Hospital (Providence Toppenish Hospital) to their organization two years later.

The establishment of Providence Milwaukie Hospital was made possible in July 1986, when Milwaukie, Oregon-based Dwyer Community Hospital also was made part of the organization. In Centralia, Washington, the establishment of Providence Centralia Hospital came in the spring of 1988, when St. Helen's Hospital merged with Centralia General Hospital. In addition to opening housing centers for seniors and women, during the 1980s the sisters established their first insurance plan, a health maintenance organization (HMO) named The Good Health Plan of Oregon in 1985.

RAPID CHANGE: 19902007

The early 1990s ushered in a number of important changes to Sisters of Providence's corporate structure. These included the establishment of a holding company called Providence Services in 1992, which encompassed the sisters' healthcare, social service, and educational ministries within their St. Ignatius Province. In December 1993, the name Sisters of Providence Health System was adopted. In addition to the name change, a significant leadership change also occurred when president and CEO Donald A. Brennan resigned, ending a 13-year career with the organization.

Progress continued throughout the decade. This was reflected in the opening of new physician clinics, long-term care centers, low-income housing developments, and the $20 million acquisition of Hood River, Oregon-based Hood River Memorial Hospital in 1999. The latter deal brought Providence Health System's hospital count to 16.

Henry G. "Hank" Walker, formerly the president and CEO of HealthPartners of Arizona, was named as Providence Health's president and CEO in 1997. Around this time, PeaceHealth agreed to merge its SelectCare health plan with the Providence Good Health Plan, resulting in an HMO with some 435,000 members. However, financial strugglesincluding a $9.4 million loss in 1997forced the health system to sell its insurance unit to Regence BlueShield in 1998. The sale of organization's largest medical group followed in 1999. That year, the Sisters of Providence Health System formally changed its name to Providence Health System in 1999.

Medicare funding cutbacks, as well as industry regulations that were expensive to implement, resulted in difficult times for Providence Health System and many other healthcare providers at the dawn of the 21st century. The system posted a net loss of $32 million in 1999 on revenues of $813 million. For this reason, Providence teamed with Seattle-based competitor Swedish Health Services in an effort to weather the storm. According to the March 6, 2000, issue of Modern Healthcare, the result was "a separate, jointly owned company to consolidate administrative tasks and develop new community healthcare services. The hospitals also plan to pool resources to purchase medical equipment and information systems." The deal saw control of nine Seattle physician clinics, as well as Providence Seattle Medical Center, shift to Swedish Health.

Following the retirement of president and CEO Hank Walker in March 2004, John Koster, M.D., assumed these positions the following month. In December 2005, Providence Health System and Providence Services announced that the two organizations, both of which were sponsored by the Sisters of Providence, would merge into one.

In June 2006, the health system opened Providence Newberg Medical Center in Newberg, Oregon. Built in accordance with Leadership in Energy and Environmental Design (LEED) standards established by the U.S. Green Building Council, the facility was recognized as the nation's first hospital to be powered entirely by wind energy. The concept of green, wind-powered buildings would have been hard for the sisters to fathom when they arrived some 150 years beforean anniversary celebrated on December 8, 2006.

Progress continued at Providence Health System as the organization ventured forward into the latter half of the first decade of the 2000s. In May 2007, Providence St. Vincent Medical Center opened its East Pavilion Medical Office Buildinga new, nine-story facility offering the newly formed Providence Brain Institute, as well as integrated oncology services that included unique retail offerings for breast cancer patients, and a healing garden for those receiving chemotherapy.

Paul R. Greenland

PRINCIPAL COMPETITORS

Adventist Health; Catholic Healthcare West; Tenet Healthcare Corporation.

FURTHER READING

Benko, Laura B., "Big Seattle Merger Seeks Consolidation," Modern Healthcare, March 6, 2000.

Geiselman, Bruce, "New Ore. Hospital Powered by Wind," Waste News, June 19, 2006.

The Good Work, Seattle, Wash.: Sisters of Providence, Spring 1984, Vol. 11, No. 1.

Lent, Christina, "St. Vincent Medical Center Celebrates 'Healing Space,'" Beaverton Valley Times, May 10, 2007.

Neurath, Peter, "Providence Sells Off Health Insurance Plan," Puget Sound Business Journal, September 11, 1998.

"Providence Systems Exploring Merger," AHA News, October 3, 2005.

Rauber, Chris, "Providence System to Buy Ore. Hospital," Modern Healthcare, April 12, 1999.

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