Oregon — PeaceHealth has reversed its plan to outsource emergency department staffing in Lane County, abandoning a controversial proposal that would have shifted physician services at three facilities to an out-of-state company.
Under the revised decision announced Friday, PeaceHealth will continue directly employing physicians at its Florence location and will offer a contract extension to Eugene Emergency Physicians, preserving local oversight at Sacred Heart Medical Center at RiverBend and other regional emergency departments.
The move follows weeks of pressure from Governor Tina Kotek, legislative leaders, healthcare providers, and community advocates who warned that outsourcing could destabilize emergency care in Lane County, jeopardize physician retention, and reduce transparency in one of Oregon’s busiest emergency systems.
“Lane County and the surrounding region need PeaceHealth to be an exceptional place of care and a reliable partner in the community,” Kotek said, calling the reversal “an important and necessary step to rebuilding trust.”
Kotek’s office had actively intervened since March, including direct meetings with PeaceHealth leadership, formal letters urging reconsideration, and ongoing oversight through the Oregon Health Authority and Oregon Medical Board. The governor and House Speaker Julie Fahey most recently pressed PeaceHealth administrators to make measurable progress by May 8.
Fahey praised the decision as a victory for local healthcare stability.
“Our community depends on stable, local emergency care,” Fahey said. “Today’s announcement is an important step in moving forward and ensuring that critical health services are there when Lane County residents need them most.”
PeaceHealth CEO Sarah Ness said the organization reconsidered after hearing concerns from state and local leaders.
“We believe this reset is the right decision for the community,” Ness said. “Together, we are focused on rebuilding trust and delivering the reliable, high-quality care our physicians, caregivers and the communities expect and deserve.”
The decision preserves local emergency physician staffing at Sacred Heart Medical Center at RiverBend, a Level II trauma center serving much of western Oregon, and avoids what critics feared could be disruptions to emergency preparedness and continuity of care.
The reversal marks a significant policy shift for PeaceHealth and highlights growing scrutiny from state leaders over major healthcare system decisions that could affect regional access and workforce stability.
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