Stayton’s community hospital is poised to trade in its independent badge for Salem Health branding, if state regulators go along with the plan. Salem Health and Santiam Hospital & Clinics announced this week that they have signed a definitive agreement and will ask the Oregon Health Authority to approve bringing Santiam’s operations into the Salem Health system. If OHA signs off, Santiam’s 40-bed hospital and its outpatient clinics would become part of the region’s largest nonprofit health network, with leaders stressing that patients should not see any immediate changes to clinical care or insurance coverage. Hospital officials are pitching the deal as a way to shore up services and keep care local across the mid-Willamette Valley.
What the hospitals announced
In a post on its website, Salem Health said the two systems have signed a definitive agreement and will submit a formal request for approval to the Oregon Health Authority. The Salem Health page notes that the anticipated outcome is for Santiam to join the Salem Health network and that the partnership is subject to OHA review. Leaders from both systems have said they are aiming for a Sept. 30, 2026 timeline for an approved partnership if regulators agree.
Santiam's message to the community
Santiam’s leadership also posted a letter to local residents explaining that the board supports the deal and that the goal is to keep leadership rooted in the community while maintaining clinical quality, Santiam Hospital & Clinics wrote. Santiam CEO Maggie Hudson told local reporters that “independence is not the likely future for Santiam and partnership was the pathway forward,” and the hospital said it intends to keep clinics open and to work to retain staff during the transition.
Scale and services
Santiam currently runs a single, independent 40-bed rural hospital and a network of outpatient clinics that serve roughly 60,000 patients each year, according to coverage by HealthLeaders Media. Salem Health, by contrast, operates the region’s largest system: Salem Hospital alone has several hundred acute care beds and the broader network employs thousands of staff, reflecting the larger footprint that hospital leaders say will help support Santiam’s clinical services.
Money and a recent failed partnership
Hospital leaders say financial strain helped drive the search for a larger partner. As reported by Salem Reporter, Santiam reported a net income of about $14.4 million in 2024 after posting a loss in 2023, and leaders pointed to pressures from federal Medicaid cuts and declining reimbursement rates. Santiam previously pursued a deal with Samaritan Health that was withdrawn after state review, and officials said they expect to file the required notice with OHA within weeks to begin the formal approval process for this latest partnership.
How the Oregon Health Authority review works
The proposed transaction must go through review by OHA’s Health Care Market Oversight program. That process starts with a preliminary review and, if warranted, can move into a more extensive comprehensive review that may stretch over several months. The HCMO program can complete a 30-day preliminary review and, if it proceeds to a comprehensive review, typically finishes that phase within a statutory window, often up to 180 days, while gathering additional information and public input, per guidance from the Oregon Health Authority. OHA posts filings and related materials and accepts public comment as part of the review.
Insurance and patient impact
Hospital leaders say patients should not see immediate changes to insurance coverage or clinical care if the affiliation goes through. Regulators and consumer agencies point out, however, that network arrangements can affect payers over time. The Oregon Division of Financial Regulation notes that Salem Health has been out of network with Regence BlueCross BlueShield since Jan. 1, 2025, while Santiam has separate contracts that hospital officials say will remain in place for now. Community members will have a chance to weigh in with OHA during the review.
Next steps for the community
Officials said they plan to submit their filing to OHA and to keep staff, patients and local leaders looped in as the review moves forward. Santiam’s site lists town-hall-style outreach and FAQs for residents who want more detail. If OHA accepts a complete notice, the review timeline, public comment period and any potential community review board will determine how quickly the merger could be approved and whether regulators attach conditions.
