Salem Health Hospitals and Clinics and Santiam Hospital & Clinics have signed a definitive partnership agreement that would bring Santiam into the Salem Health system, a move the organizations say is intended to strengthen healthcare delivery and preserve long-term access to medical services in the Mid-Willamette Valley.
If approved by the Oregon Health Authority, the partnership would make Santiam Hospital & Clinics part of Salem Health while keeping local, community-based governance in place through a Santiam governing board. Leaders say that structure is meant to preserve local decision-making for the Santiam Canyon and Stayton-area communities while connecting Santiam to a larger system’s staffing and clinical resources.
“This is an exciting opportunity to improve healthcare for the patients we serve and grow services for the Santiam Canyon,” Cheryl Nester Wolfe, RN, president and CEO of Salem Health Hospitals and Clinics, said in a statement announcing the agreement.
The agreement, signed Jan. 19, follows a nonbinding letter of intent the organizations signed in December 2025. The proposed transaction is now pending regulatory review through the Oregon Health Authority’s Health Care Market Oversight program. If the state approves the transaction, the organizations said they expect the partnership to be finalized by Sept. 30, 2026.
Santiam Hospital & Clinics, based in Stayton, operates a 40-bed acute-care hospital and 13 medical clinics. The nonprofit system employs more than 600 staff members and serves about 40,000 residents across Marion and Linn counties, according to the announcement.
Salem Health is a nonprofit system anchored by Salem Hospital, described by the organization as the state’s largest acute-care facility and a Level 2 trauma center, with additional operations that include West Valley Hospital in Dallas and a network of clinics. Salem Health is also the region’s largest private employer, with more than 6,400 employees.
Leaders from both organizations framed the partnership as a way to maintain community-based care while improving the operational sustainability of Santiam’s services. The organizations said joining a larger system is expected to help with provider recruitment and improve access to advanced clinical technology and other operational support, while keeping a local board in place to remain responsive to community needs.
Maggie Hudson, president and CEO of Santiam Hospital & Clinics, said the proposal reflects a collaborative, community-driven vision for the region’s healthcare future, according to the announcement.
Healthcare partnerships like this have become more common as smaller hospitals and clinic systems face persistent pressures tied to staffing shortages, recruiting challenges, technology costs and increasingly complex reimbursement and regulatory requirements. The organizations did not announce immediate service changes as part of the proposed agreement and said operations will continue as normal during the state review process.
Next, the organizations said they will submit a formal request for review to the Oregon Health Authority’s Health Care Market Oversight program, which examines healthcare transactions to determine whether they align with state goals around cost containment and health equity. The timeline and process for review will be determined by the state after filings are submitted.
The proposed agreement would connect one of Oregon’s remaining independent rural hospital systems with the region’s largest healthcare provider. Santiam serves the Santiam Canyon and surrounding communities east of Salem, while Salem Health’s network spans the Mid-Willamette Valley through its hospitals and clinics.
Both organizations emphasized that the proposed structure is designed to balance system resources with local oversight. Under the model described in the announcement, Santiam would retain a local governing board, with decision-making intended to remain responsive to local needs as the hospital and clinics operate within the larger Salem Health system.