State approves Oregon’s first rural hospital network

By THEO GREENLY/Jefferson Public Radio

With rural hospitals across Oregon under pressure amid rising costs and staff shortages, the Oregon Health Authority has approved a new network to help.

The Cascades Rural High Value Network will allow small hospitals to pool their purchasing power, creating an economy of scale on par with larger hospitals.

It includes hospitals in Coos Bay, Bandon, Coquille, Gold Beach and Reedsport. The rest are in eastern Oregon, in Lakeview, Burns, John Day, Heppner, La Grande and Enterprise.

Each hospital stays independent, but together they’ll own and run the network. OHA says it’s expected to be the first network of its kind in rural Oregon.

The network will be managed by South Dakota-based Cibolo Health, a health care management company that helps smaller hospitals work together as a larger group. Cibolo runs similar networks across the country.

Cibolo chief of staff Kylie Bucher said the network aims to give smaller hospitals the purchasing power of larger ones when buying supplies and equipment.

“Alone, an independent hospital in rural Oregon isn’t going to have the power to get those same prices,” Bucher said. “But as a network, they can.”

The hospitals will also share data tools most couldn’t otherwise afford. Bucher said a shared system will pull together information from insurers and patient records to help spot high-risk patients early.

“If we can get the care to those patients early, we can prevent them from getting sicker, thus costing more money,” Bucher said.

Clinical teams from the hospitals will also meet to share best practices.

The state expects to help pay for the network through the federal Rural Health Transformation Program. In its application, the network asked for $17.5 million over five years. That money would cover the shared data system, care coordinators, and a hub for specialist referrals and patient transfers.

OHA’s conditions require the hospitals to stay independently owned and run for at least five years. They also bar the hospitals from sharing sensitive pricing information with each other. The network must publish an annual progress report.

Bay Area Hospital’s turnaround

Coos Bay’s Bay Area Hospital, the largest hospital on the Oregon coast, is among those joining the new network.

About a year ago, it faced financial turmoil and nearly handed control to an out-of-state company. In late 2024, its board moved toward a deal for Quorum Health, a Tennessee-based company owned by private equity, to run the hospital. Many residents opposed the deal, fearing a loss of local control. Quorum pulled out in August 2025, after board members who campaigned against the deal took control.

New leaders took over and kept the hospital independent. Chief Financial Officer Patrick Banks said joining the network doesn’t change that.

“No, ownership is not changing,” Banks said. “All of the participating hospitals retain control of the local board, the CEO… and all of the participants are still setting their own priorities.”

Banks said the network is still in its early stages. He said joining costs the hospital mostly “time and effort,” and Bay Area isn’t counting on it to directly improve its finances. The hospital is in its tenth straight month in the black, according to its October board packet. Banks said it’s on track to end the fiscal year that way.

“We’re pleased to be on budget and doing the things that we need to do to continue as an independent hospital,” Banks said.

Banks said the hospital is now turning to growth. It recently filled out its orthopedics team, which also covers emergency surgery. It’s expanding its interventional radiology team and recruiting more physicians.

Later this year, Bay Area also plans to start a new cancer treatment program, according to board minutes. Patients now have to travel to Eugene, Medford or Portland for that treatment.

This story was originally published by Jefferson Public Radio, which is based in Ashland and reports on southern Oregon and northern California. It strives to build a diverse community of informed citizens through fact-based journalism that stimulates civic discourse, inspires community engagement and fosters the art of storytelling.