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TRIBUNE FILE PHOTO - OHSU's campuses on the South Waterfront and Marquam Hill, connected by the Portland Tram, will be part of a new agreement with Salem Hospital. The first-of-its-kind pact still must be approved by both hospitals' boards.Oregon Health & Science University and Salem Health are giving a final review to a first-of-its-kind partnership that will manage the hospitals in Salem and a nearby community.

The partnership, however, will not be a merger.

OHSU, a public corporation since 1995 that retains state support, and Salem Health will retain their governing boards. Employees — 14,616 at OHSU, and about 3,900 at Salem Health — will continue to work for separate organizations.

OHSU, one of the largest Portland-area employers, has 576 licensed beds, 528 of which are staffed.

Salem Health, the largest private employer in the state capital, has 454 licensed acute-care beds. In addition to Salem Hospital, it also operates West Valley Hospital in Dallas, Monmouth Medical Center, and clinics and other operations in Salem and Keizer.

“We saw that an independent hospital or health system, such as we are, is probably going to change dramatically as our whole industry consolidates around the country,” says Norm Gruber, chief executive of Salem Health.

“We wanted to do this when we felt we are still in a position of strength, clinically and financially. We thought it was time to find a partner.”

The boards will review a “definitive agreement,” which goes into greater detail than an earlier memorandum of understanding, and expect to approve it in September.

When OHSU Partners comes into existence by a target date of Oct. 1, officials from both say the only obvious change will be in the logo, which will be OHSU’s.

“I do not see an immediate change for patients or staff on Oct. 2,” says Gruber, who will become president of the new management agency. “This is something that is going to happen over time.”

Salem Health and OHSU, even before the emergence of the partnership, had cooperative ventures between Salem Cancer Institute and OHSU Knight Cancer Institute, and women’s and children’s programs at Salem Hospital and OHSU Doernbecher Children’s Hospital.

When Salem Health announced four years ago it was considering an affiliation with a larger institution, Gruber says its board looked at seven proposals – but quickly decided to explore the OHSU option.

“We saw a connection between a teaching institution and a community hospital and the synergy that could come from that,” Gruber says. “For us, it allows us to have the value of some local independence with the value of being connected with another larger institution.”

Peter Rapp, OHSU executive vice president and executive director of OHSU Healthcare, will become chief executive of OHSU Partners. In addition to improving access and increasing capacity, Rapp says, the partnership will allow opportunities to eliminate duplication and reduce costs.

“We are just assembling that team to do the work,” Rapp says.

Chief operating officers will be Cheryl Nester-Wolfe, who has the same role at Salem Health, and Cindy Grueber, who has the same role at OHSU Healthcare. Grueber has her position on an interim basis while a search is conducted.

“It was clear (during the discussions) that what Salem was interested in achieving was consistent with what OHSU’s interests are,” Rapp says.

Rapp says that for OHSU, Salem Health offers increased opportunities for teaching – and in community settings that students are more likely to encounter than at OHSU, where patients often have complex diseases.

Both Gruber and Rapp say OHSU Partners could become an option for other Oregon hospital and health systems in the future.

Rapp says that OHSU has had community outreach outside the Portland area and has moved more toward partnerships when doing so.

“We think of ourselves as no longer just on the (Marquam) Hill, but having a positive effect in communities in Oregon,” he says. “So this isn’t totally foreign to us, but on this scale, Salem represents a whole new opportunity for OHSU.”

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