Asante seeks to dodge state review of surgery center purchase

By NICK BUDNICK and MIKE FRANCIS/The Lund Report

Last fall, as Asante prepared to close its community hospital in Ashland while claiming financial difficulties, it quietly asked the state for permission to spend an undisclosed amount of money to buy a stand-alone surgery center in Medford.

Asante, however, has since declined to provide requested information about the deal for the state’s review. And now its leadership is asking to bypass the state’s approval process — saying the small surgery business is at risk of closing otherwise.

At the core of the matter, state officials charged with curbing costs want to know how much the cost of a given surgery will go up if the deal goes through. And leaders of Asante — a nonprofit that employs more than 6,000 people and operates hospitals in Medford, Grants Pass, and for a while longer, Ashland — don’t want to answer.

Asante leaders did not respond to a request for comment on the transaction. In its request for expedited approval, its attorney, Kristen Roy, wrote that “Without this transaction, SCSO will almost certainly become insolvent in the immediate future and will be required to shut its doors.”

The situation comes as local residents are increasingly questioning a lack of transparency by Asante and whether the health system is fulfilling its obligations in light of the lucrative benefits it has been awarded as a tax-exempt organization in exchange for promising to serve local communities.

The clash between Asante and the Oregon Health Authority also represents the latest test for the state program that state lawmakers have tasked with overseeing large health care mergers and partnerships in Oregon.

Considered the toughest such program in the country, the Health Care Market Oversight office was set up to curb the risk of mergers’ negative effects on cost, care and working conditions.

Defenders of the program say it is needed to protect consumers, workers and patients, and that the financial emergency loophole being used by Asante is too broad. Critics of the program, meanwhile, have said the review process takes too long and is too intrusive.

Surgery purchase application submitted last year

In its application, Asante told state officials it expects to convert the surgery center to an arm of Asante.

The proposed purchase by Asante represents “the most responsible and sustainable path forward,” wrote Skyler Dickson, executive director of the surgery center.

Terms of the purchase agreement, as well as the financial results of the surgery center, were entirely redacted by the health authority.

In response to queries from The Lund Report, an Asante spokesperson referred to prepared statements that did not address the surgery center purchase. A follow-up request on the latest developments did not draw a response.

Application materials say Asante will purchase all the assets of the surgery center, including its real estate, while upgrading the facility. The surgery center employed 85 people, according to the initial application.

The surgery center provides outpatient procedures in a variety of categories from neurosurgery to plastic surgery.

However, its success was diminished when some physicians left the center in 2022 and established a competing practice 6 miles away, sparking the surgery center to file a lawsuit against the new competitor.

Asante is now interested in taking over the surgery center facility to make better use of its beds, using its capacity to open up space in the Medford hospital, Rogue Regional Medical Center, to make room for high-acuity patients, which tend to generate more profit.

“One of Asante’s objectives in the transaction is to increase the level of service activity at the facility. A paired objective is to improve Asante’s own ability to meet community needs, by securing, at a reasonable level of capital investment, clinical space adjacent to the RRMC building, and thereby being able to provide integrated but lower-acuity services at the current SCSO site, presenting future opportunities to repurpose hospital space for higher-acuity services,” according to Roy’s more recent application for expedited approval.

“For efficiency of operations and integration, Asante anticipates that the facility will become licensed as an outpatient department of RRMC. As a satellite of RRMC, services provided at the facility will be integrated with the RRMC, allowing for greater coordination of care for patients of SCSO.”

Another advantage of the deal for Asante is that the same surgery services, if billed by Asante, would generate higher payments from insurance companies — a facet of health care that critics say is unfair and drives consolidation that hurts patients.

State officials’ effort to get to the bottom of that pay differential is one of the areas that has sparked resistance for Asante.

Asante leadership also appears to have taken issue with the state’s questions about its reported worst-in-the-state levels of charity care provided for needy patients.

Declines to answer state’s questions

But after the initial application was submitted, Asante officials declined to answer questions and provide the insurance contracts that the state had requested at least as early as November 2025.

For one thing, the state officials asked Asante to explain why it was not providing community members with what the state deemed appropriate levels of charity care.

In its response, Asante said its philosophy toward charity care won’t change as a result of the purchase, and therefore the question was inappropriate.

Asante’s response contended that it’s inappropriate to provide state officials with its contracts with health insurance “payors” during the initial review phase of the merger approval process, contending that such a question is better left for a fuller, comprehensive review by the state.

In doing so, Asante acknowledged that providing the contracts would show the purchase will drive up costs for care — something that the state’s review program is intended to investigate and guard against.

“It is established, and should be assumed to be the case here, that third-party payor reimbursement for services provided at outpatient hospital facilities is higher than for services provided at ambulatory surgery centers,” said the health system’s response to the state’ questions.

But the question is irrelevant, it suggested, since the volume of care taking place at the facility “is candidly too small” to have an effect on the health care system.

The refusal to submit the documents and answer questions caused state officials to pause their review of the process.

Emergency approval sought

Now, having delayed the process since November, Asante contends the passage of time has further hurt the surgery center’s solvency.

It is asking the state to approve the purchase by May 1.

Under state criteria, to take advantage of the program’s financial emergency clause, a situation must represent an “emergency” that “immediately threatens health care services,” and show “ the transaction is urgently needed to protect the interest of consumers and to preserve the solvency of an entity.”

Asante’s application for expedited approval does not spell out or explore alternatives to simply buying the surgery center, other than to say access to care could suffer.

If the center does close, it’s unclear if Asante could simply hire the surgeons who work there currently, and purchase the facility as real estate under its existing agreement with ownership.

Nor does the Asante application explore to what degree the small volume of patients currently using the surgery center could shift their care to the competing surgery center located six miles away.

The Lund Report is a nonpartisan nonprofit news site focused on health care news in Oregon and southwest Washington. It emphasizes high-quality journalism that promotes awareness and understanding of pressing issues while holding government and industry accountable.