The Ashland City Council has given initial approval for the Rogue Valley hospital system Asante to take over the struggling local hospital.
The city owns the Ashland Hospital facilities, but it's now operated as an independent nonprofit.
Hospital leaders say it's at a disadvantage to larger hospitals and hurt by tight federal health care reimbursements. Without a merger, they say, it could close.
The Ashland Daily Tidings reports the hospital has 400 employees and a $25 million payroll - the city's third-largest employer.
Asante officials said it would try to keep hospital workers in Ashland or offer them jobs elsewhere in the organization.
A final agreement is expected to take 60 to 90 days.
Asante would own the hospital and take on debt and pension obligations.