PeaceHealth’s ER Gamble
The Dubious Wisdom of Contracting Emergency Care to Private Equity to Save Money
For 35 years, Eugene Emergency Physicians has been the backbone of emergency care in Lane County. Their doctors and physician associates took care of my daughter when we thought she needed an appendectomy, my father when he had a mini-stroke, and my grandmother when she fell and broke her hip. Most importantly, they knew the community resources that patients need to recover and stay healthy. That institutional knowledge saves lives. Now, PeaceHealth's top Oregon executive is asking us to trust a process he won't explain.
Dr. McGovern Says EEP “Didn’t Earn the Contract.” The Community Deserves to Know Why.
On February 19th, PeaceHealth’s Chief Hospital Executive Dr. Jim McGovern published a community letter explaining the decision to replace EEP with ApolloMD, an Atlanta-based staffing company. Unlike the physicians he seeks to displace, he did not provide an interview where he would be subject to questioning and journalistic scrutiny. Further, his letter raises more questions than it answers, and some of its central claims don’t survive scrutiny.
“EEP Didn’t Earn the Contract”
Dr. McGovern states plainly that EEP “fully participated in a competitive process and didn’t earn the contract,” and that ApolloMD was “the more well-rounded and qualified partner.” He offers no specifics. No metrics. No benchmarks. No explanation of what EEP lacked after 35 years of demonstrated performance in this exact facility with these exact patients.
What we do know is that EEP was never offered the opportunity to match ApolloMD’s proposal, a standard practice in contract renewals that would have allowed a direct, transparent comparison. We also know that the medical staff at RiverBend have responded to this decision with a formal no-confidence vote in hospital leadership. When the physicians, hospitalists, and nurses who work alongside the emergency department every day express that level of alarm, “trust the RFP process” is not a sufficient answer to the community.
Acknowledging the Problem Without Accepting Responsibility for It
Dr. McGovern correctly acknowledges that the 2023 closure of the University District emergency department “contributed to increased volume” at RiverBend. The ED has gone from roughly 55,000 visits annually to more than 80,000, a 45% surge absorbed by a facility that was never designed to be the region’s sole emergency department. On February 9th, 103 patients were crammed into hallways, closets, and converted administrative offices.
PeaceHealth closed University District because it was losing $24 million per year during a period when the health system’s net cash flow totaled negative $600 million. That financial context is real, but why can’t PeaceHealth explain why the closure proceeded without a concurrent, adequate expansion of RiverBend capacity? The $25 million in improvements Dr. McGovern cites, including new beds, nursing shifts, care spaces, and a renovation beginning this month, are responses to a crisis that PeaceHealth created and then left EEP to manage for two years without adequate support. As former EEP medical director Dr. Charlotte Ransom put it, “The hospital is utilizing Eugene Emergency Physicians as a scapegoat for problems that are directly the result of the closure of University District.”
Peer-reviewed research consistently identifies ED overcrowding as driven by inpatient bed boarding, insufficient nursing support, and system-level inefficiencies — not emergency physician performance. HFMA research shows aligning nursing capacity with patient arrival patterns improves efficiency by up to 30%. PeaceHealth had not fully implemented these evidence-based strategies before concluding that the problem was their physicians.
The Corporate ER Playbook
The emergency medicine staffing industry has a well-documented pattern: national firms underbid to win contracts, rely on expensive traveling physicians during the transition, then raise costs in subsequent years. Three major PE-adjacent staffing companies, American Physician Partners, Envision Healthcare, and NES Healthcare, have declared bankruptcy using this model, leaving physicians unpaid and communities holding the bag.
Locum tenens emergency physicians cost 20 to 50 percent more than permanent staff when travel, housing, malpractice, and agency fees are included. With all 41 EEP providers refusing to work for ApolloMD, where will RiverBend’s replacement physicians come from during a national shortage? ONA spokesperson Kevin Mealy warned: “You’re getting folks with a revolving door who would be here for a few months and then gone.”
“National Resources” and an Opaque Corporate Record
Dr. McGovern argues that ApolloMD brings “national resources and established programs” and experience with “high-volume, highly complex” emergency departments. These are legitimate considerations. But they come with a context his letter omits entirely.
ApolloMD markets itself as “physician-owned with no outside investors,” yet the American Academy of Emergency Medicine has raised serious concerns. AAEM President Robert Frolichstein noted that ApolloMD was backed until recently by ValorBridge Partners, a private equity firm, and urged review under Oregon’s SB 951, which restricts corporate ownership of medical practices. Tracxn lists ValorBridge as ApolloMD’s sole institutional investor across $10.9 million in funding. ApolloMD is privately held with no publicly disclosed financial records — its estimated annual revenue exceeds $400 million, but its profitability and corporate structure remain opaque.
A 2022 investigation identified ApolloMD among the biggest bidders on ER contracts alongside PE-owned firms using physician oversupply to suppress wages and extract profits. ApolloMD has also faced a lawsuit under the False Claims Act for billing the federal government at physician rates for services provided by mid-level practitioners. While nurse practitioners and physician associates play a vital role in emergency medicine, some complex cases require the greater experience of a physician. Will ApolloMD have a financial incentive to staff accordingly?
Displacing 41 Providers Who Want to Stay
Every one of EEP’s 41 doctors and physician associates has refused to work for ApolloMD for at least 90 days, with many planning to leave permanently. The Oregon Nurses Association has petitioned PeaceHealth to reverse course, calling the move a “costly mistake.” Sixty PeaceHealth hospitalists and nurses signed a letter supporting EEP. The AAEM, Pacific Northwest Hospital Medicine Association, and Northwest Medicine United have all urged contract renewal. EEP itself has publicly stated it would “wholeheartedly welcome a path forward” to continue under a local banner.
Dr. McGovern characterizes this groundswell as “a pressure campaign intended to reverse the decision” driven by “pressure and emotion, rather than thoughtful, deliberate judgment.” With respect, that framing is unworthy of the concern being expressed. The Oregon Nurses Association is not a sentimental organization. The AAEM is not a sentimentalist trade group.
PeaceHealth hospitalist Dr. Dave Schwartz, who witnessed a failed outsourcing attempt in 2014, said simply: “What happens with these third-party groups — all these companies care about is numbers and money.” These are clinical professionals raising evidence-based concerns. They deserve a more substantive response than being told their judgment is emotional.
What Should Happen Next
Dr. McGovern closes his letter by expressing commitment to a “smooth transition.” That is not good enough. PeaceHealth should allow EEP to match ApolloMD’s proposal with full transparency about the criteria, something a 35-year partner has earned the right to attempt. Simultaneously, PeaceHealth should accelerate the operational improvements it belatedly began, including restoring nursing capacity, implementing real-time inpatient bed management, and addressing the structural limitations of a facility that was never designed to bear this volume alone.
The doctors want to stay. The nurses want them to stay. The patients need them to stay. The medical staff have voted no confidence in the leadership making this decision. When that many people with that much expertise are raising the alarm, the burden of proof is on PeaceHealth, not to assert that the process was thorough, but to show the community exactly what it produced, and why a Georgia-based corporation with zero Oregon experience is the answer to problems that Oregon administrators created.
If you want PeaceHealth to reconsider, the Oregon Nurses Association has an active petition. Contact PeaceHealth’s Oregon leadership directly. Show up. Speak up. This is your emergency room.
Disclaimers
In writing my columns, I depend on the representations made in the press. Some of the facts may remain in dispute.
The views expressed herein are those of the author and not necessarily those of the Department of Navy, the Department of Defense, the University of Oregon, or any other entity with which the author is affiliated.
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References
KLCC, “PeaceHealth’s Split With Local Emergency Physicians Sparks Disappointment, Resolve,” Feb. 11, 2026. https://www.klcc.org/health-medicine/2026-02-11/peacehealths-split-with-local-emergency-physicians-sparks-disappointment-resolve
KLCC, “PeaceHealth to Replace Local Emergency Room Doctors With Out-of-State ApolloMD,” Feb. 4, 2026. https://www.klcc.org/health-medicine/2026-02-04/peacehealth-to-replace-local-emergency-room-doctors-with-out-of-state-apollomd
Lookout Eugene-Springfield, “Emergency Doctors Planning to Leave PeaceHealth ‘Disaster’,” Feb. 15, 2026. https://lookouteugene-springfield.com/story/health/2026/02/15/emergency-doctors-planning-to-leave-peacehealth-disaster/
ApolloMD, company website, “Who We Are.” https://apollomd.com/who-we-are/
ApolloMD, “Support MDs to Deliver Value-Based Care,” May 2023. https://apollomd.com/blog/support-mds-and-apcs-to-deliver-value-based-care/
KEZI, “American Academy of Emergency Medicine Extends Support for EEP Amidst PeaceHealth Changes,” Feb. 2026. https://www.kezi.com/news/local/american-academy-of-emergency-medicine-extends-support-for-eep-amidst-peacehealth-changes/article_bd9bee39-b80e-4099-a238-ec4c94a5ad2b.html
Tracxn, “ApolloMD Company Profile, Funding & Competitors.” https://tracxn.com/d/companies/apollomd/__qkyU0Abaec1V0XaPUZ4os8liIbzkejEdNzfNVtCjUXs
Growjo, “ApolloMD Incorporated: Revenue, Competitors, Alternatives.” https://growjo.com/company/ApolloMD_Incorporated; see also PitchBook, “ApolloMD Company Profile.” https://pitchbook.com/profiles/company/56111-50
The Lever, “Private Equity Gloats Over a Doctor Glut,” May 20, 2022. https://www.levernews.com/private-equity-gloats-over-a-doctor-glut/
KLCC, “Eugene Emergency Physicians Sign Agreement Refusing to Work for ApolloMD,” Feb. 12, 2026. https://www.klcc.org/news-briefs/2026-02-12/eugene-emergency-physicians-sign-agreement-refusing-to-work-for-apollomd
OPB, “PeaceHealth Hospital Eugene Oregon Emergency Room Doctors,” Feb. 8, 2026. https://www.opb.org/article/2026/02/08/peacehealth-hospital-eugene-oregon-emergency-room-doctors/
NBC16, “ONA Urges PeaceHealth to Avoid ‘Costly Mistake’ of Dropping Eugene Emergency Physicians,” Feb. 13, 2026. https://nbc16.com/news/local/ona-urges-peacehealth-to-avoid-costly-mistake-of-dropping-eugene-emergency-physicians-02-13-2026
KLCC, “Emergency Doctors Welcome ‘Path Forward’ to Continue Local Practice With PeaceHealth,” Feb. 17, 2026. https://www.klcc.org/health-medicine/2026-02-17/emergency-doctors-welcome-path-forward-to-continue-local-practice-with-peacehealth
Anesthesia Experts, “Private Equity in Anesthesia: Background & Long-Term Implications.” https://anesthesiaexperts.com/private-equity-anesthesia-background-long-term-implications/; see also The Lever (note 9).
LocumStory, “Locum Tenens Compensation Trends.” https://locumstory.com/spotlight/locum-tenens-compensation-trends
CHG Healthcare, “State of Locum Tenens Report.” https://chghealthcare.com/chg-state-of-locum-tenens-report
Cureus / PMC, “Emergency Department Overcrowding: A Review of Strategies and Solutions” (2024). https://pmc.ncbi.nlm.nih.gov/articles/PMC10890971/
HFMA, “4 Strategies to Reduce ED Overcrowding” (2025). https://www.hfma.org/operations-management/4-strategies-to-reduce-ed-overcrowding/
Health Affairs Scholar, “Association Between Bed Management and Emergency Department Overcrowding” (2024). https://academic.oup.com/healthaffairsscholar/article/3/9/qxaf168/8241101
The Oregon Nurses petition is here: https://fs22.formsite.com/nAjztM/thhpknqu2o/index
What an incredible piece of reporting. Thank you for your clarity.