Local hospital leaders say health care in the Salem area is at an “inflection point,” where rising costs, workforce shortages and low reimbursement rates are forcing hospitals to adapt under mounting pressure.

That was a key point as Salem Health and Santiam Hospital & Clinics leaders fielded questions about their proposed merger and local access to health care at a Tuesday, April 7, forum at the Salem Convention Center. 

The event was Salem Health’s fourth annual State of our Region’s Health Care forum. Nearly 200 local business, nonprofit and government leaders attended the invite-only event to hear from Santiam CEO Maggie Hudson and Leah Mitchell, Salem Health’s chief integration officer and executive vice president of operations. 

Before the panelists took the stage, a video featuring Becky Hultberg, CEO of the Hospital Association of Oregon, Hudson and Salem Health CEO Cheryl Nester Wolfe premiered. In it, the leaders pointed to the uncertain state of health care in Oregon.

“The presence of hospitals in our communities is not a given,” Hultberg said.

It is those conditions that have led to the growing need for partnership in health care, Hudson told the audience.

“The future of health care is collaboration,” she said. “We have the same mission, the same values, we’re offering the same services – we need to do it collaboratively in order to face this new health care landscape.”

Moderator Lane Shetterly, a former Oregon state representative and Salem Health Board of Trustees member of over a decade, posed pre-selected questions to Hudson and Mitchell. The questions were crafted based on those received by the public through an online portal.

Sitting side by side, Mitchell and Hudson foreshadowed the forthcoming merger between the two hospitals, which was formally announced in January. The hospitals are hoping for state approval later this year. The state’s green light would mark Santiam’s loss of its independent status and absorption into the Salem Health system. 

Hudson said the partnership will allow Santiam to grow its services, infrastructure and recruit and retain more providers. She previously told Salem Reporter that growth would likely first happen in the hospital’s obstetrics and gynecology departments. She said Santiam does not have the financial reserves to fund that growth itself. 

In the video, Nester Wolfe said the partnership with Santiam will bring stability and growth to health care in the canyon for years to come.  

As the partnership unfolds, Nester Wolfe and Hudson have embarked on a “road show,” doing several town halls, radio interviews and social media outreach. In that, Hudson said the number one question she has heard among residents is about Regence BlueCross BlueShield insurance coverage. 

While Santiam has a contract with the insurer until 2027, Regence has been out of network at Salem Health since the start of 2025 after negotiations between the organizations fell through. 

If the partnership is approved, the hospitals would negotiate jointly, Hudson said, but “each entity still has the ability to have other contracts.” 

Medicaid was another insurance highly discussed.

The insurance, managed locally by PacificSource, does not pay hospitals the amount of what it costs to deliver care, meaning hospitals take a loss when treating Medicaid patients. Over 160,000 people use Medicaid in Marion and Polk counties. 

Another strain to the system is a shortage of the health care workers, which can make it harder for patients to get care, like seeing long delays for getting an appointment. Mitchell said one reason for the shortage are the long training periods required for new providers. She said Salem Health has worked recently to strengthen access points in its system, and now, in many areas, it doesn’t take long to get an appointment with a Salem Health provider. 

Mitchell and Hudson were hopeful that by pooling resources under the partnership, the hospitals could pay competitive wages, invest more in training and offer a strong career pipeline to strengthen their workforces. 

With the merger top of mind, Shetterly asked Mitchell about why hospitals like Salem Health absorb independent practices. 

The Salem-based system includes 22 outpatient specialty and primary care clinics in Marion and Polk counties, on top of Salem Hospital and West Valley Hospital in Dallas. It most recently acquired independent practices Willamette Urology in 2024 and Hope Orthopedics in 2023. 

Mitchell pointed to the urology and bone care practices to push back on the notion that Salem Health “gobbles up” smaller practices. She said those practices approached Salem Health saying, “we can’t survive anymore,” and asked to be employed. 

Hudson said Santiam hasn’t seen such cases because the canyon does not have as many independent practices.

Contact reporter Hailey Cook: [email protected].

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