A 2014 Look at the Faith-Based Hospitals in Oregon

Though regional faith-based chains like Providence and PeaceHealth are well-established in Oregon, some of the nation’s biggest religious hospital networks are less visible here such as Adventist Health and Trinity.

This is the seventh story in The Lund Report’s 2015 review of Oregon hospital finances.

Today, we’re looking at faith-driven hospitals that didn’t “fit” into our earlier stories.

Many of the healthcare groups we’ve examined so far have religious underpinnings: Providence and PeaceHealth are Catholic, Samaritan says it is church affiliated. Those institutions also have a significant footprint comprising multiple hospitals in Oregon.

But today we’re looking at hospitals owned by very large nonprofits that all have a relatively small footprint in Oregon. Adventist Health operates a large hospital in Portland and a small one at the coast. Catholic Health Initiatives and Trinity are major players elsewhere in the U.S., but run relatively small and rural hospitals in Oregon.

For the third year, we are digging into the money and operations of these major health care institutions. In our first six stories, we examined Providence Health and Services, Legacy Health, Kaiser Permanente, Salem Health, Asante, Samaritan Health, St. Charles Health System, and PeaceHealth.

The figures underpinning these hospital snapshots come from multiple sources:

  • Profit, revenue and charity care figures come from audited reports prepared by each hospital and submitted to the Office for Oregon Health Policy & Research.
  • The size and reach of each hospital, as summarized through available beds, and inpatient, outpatient and emergency room figures, are reported by hospitals to the state-mandated Databank program.
  • Executive compensation figures come from the IRS 990 tax forms that all nonprofits are required to file. Click here to view a break-out of these figures.
  • Additional financial details about hospital chains come from IRS 990 forms and from the systems’ own unaudited reports.

This review of hospitals within faith-based chains draws from the most recent available data. With executive compensation figures, that means we are relying on 2013 tax forms. But 2014 hospital-specific figures have newly been made available by the state, and those results are also included in this story.

Adventist Health

Affiliated with the Seventh-day Adventist Church, Roseville, California-based Adventist Health runs 20 hospitals as well as a network of clinics and other health programs across Hawaii, Washington, California and Oregon.

The Adventist network expanded this year when it took over Lodi Health, and acquired its 20th hospital – in California in the process. And officials at the nonprofit health system have said they are in talks to add other California hospitals to their network.

Fiscal year 2014 tax filings that would provide financial insight into the effects of the Affordable Care Act are not yet available, but tax filings from before the ACA expanded insurance coverage showed the Adventist Health network spending more than it earned. It reported to the IRS that its expenses exceeded its revenues by $55.3 million in 2013, and by $21.1 million loss in 2012.

Robert Carmen spent most of 2013 as Adventist Health CEO, but retired late in the year. His total compensation was $1.5 million: $989,976 in base pay, $126,046 in bonuses and incentives, $17,787 in deferred compensation, $27,048 in nontaxable benefits, $352,983 in other forms of compensation

Current President and CEO Scott Reiner was named to his post in December 2013, after spending many years as a California hospital executive within the chain. For most of 2013, Reiner was a director and executive vice president at Adventist. His total compensation that year was $1.3 million, though not all of that was in direct pay. His base pay was $688,994, and he also received $84,288 in bonuses and incentives, $169,989 in deferred compensation, $28,391 in nontaxable benefits, and $302,585 in other forms of compensation.

Adventist Medical Center

Adventist Medical Center serves east Portland, an area where low- and moderate-income households are moving as gentrification spreads in the central city.

That demographic shift may one reason Adventist is one of the only hospitals in Oregon to see charity care spending climb in 2014. Most of the state’s hospitals saw dramatic drops last year in charity care, the term used when healthcare organizations provide free care or reduce bills for patients unable to pay. With the Affordable Care Act drastically expanding access to health care, most hospitals have reported a dramatic drop in charity care spending. But Adventist in Portland saw a 4.1 percent climb – though with more patients able to pay their bills, overall uncompensated care did drop.

In mid-2014, Joyce Newmyer was named president and CEO of Adventist Medical Center in Portland, as well as Adventist Health’s entire Northwest region. Previously employed by a Seventh-day Adventist hospital in Maryland, Newmyer’s executive compensation figures at the Oregon hospital are not yet available.

Her predecessor, Tom Russell, left his position at the helm of the Portland hospital in 2014 when he was promoted to corporate vice president of population health innovations for Adventist. It’s not clear if he still works for the health system and is not listed on Adventist’s “leadership” webpage. As CEO of the Portland hospital in 2013, his total compensation was $631,609: $419,723 in base pay, $95,464 in deferred compensation, $25,250 in nontaxable benefits, and $91,172 in other forms of compensation.

Finances, year 2014:

Profit: $5.5 million, up 97.5 percent from 2013.

Net patient revenue: $303.7 million, up 9.3 percent.

Charity care charges: $18.8 million, up 4.1 percent.

Profit margin: 1.5 percent, compared to 0.9 percent the previous year.

Size and scope, as of 2014:

Available beds: 248.

Inpatient days: 44,894.

Emergency department visits: 53,001.

Outpatient visits: 480,573.

Tillamook Regional Medical Center

Tillamook County residents built their community hospital at a cost of $1.2 million in 1950. In 1973, the county signed an agreement to have Adventist operate the site under an agreement that continues through 2045. In 2013, Adventist opened Tillamook Medical Plaza immediately east of the hospital.

David Butler was named CEO of Tillamook Regional Medical Center in December 2013, and his compensation with the hospital chain is not yet available.

Butler replaced Larry David, who left Tillamook to take charge at Wallowa Memorial Hospital in Enterprise. In 2013, as president of Tillamook Regional Medical Center, David’s reported total compensation was $446,911: $270,088 in base pay, $55,638 in deferred compensation, $25,171 in nontaxable benefits, and $96,014 in other forms of compensation.

Finances, year 2014:

Profit: $1.5 million, up 117.6 percent from 2013.

Net patient revenue: $62.6 million, up 16.8 percent.

Charity care charges: $3.2 million, down 49.4 percent.

Profit margin: 2.3 percent, compared to 1.2 percent the previous year.

Size and scope, as of 2014:

Available beds: 25.

Inpatient days: 2,908.

Emergency department visits: 9,359.

Outpatient visits: 67,244.

Catholic Health Initiatives

Colorado-based Catholic Health Initiatives is one of the nation’s largest healthcare systems, and rapidly getting larger. It has operations in 19 states, and runs 105 hospitals and 10 insurance plans; its assets total $21.8 billion. Yet CHI has a relatively small presence in the Oregon, with just two hospitals here.

CHI CEO Kevin Loftin received total compensation of $3.1 million in 2013: $1.4 million in base pay, $951,835 in bonuses and incentives, $343,907 in deferred compensation, $21,785 in nontaxable benefits, and $401,727 in other forms of compensation

Mercy Medical Center

The Sisters of Mercy raised $12,000 from residents of Roseburg to build and open Mercy Medical Center in 1909. Nearly nine decades later, the hospital joined with other faith-based groups to found CHI.

Today, Mercy Medical is Douglas County’s only acute-care hospital, serving an area of more than 5,000 square miles and a population with often challenging medical needs.

Mercy Medical CEO Kelly Morgan’s reported 2013 total compensation was $823,751: $471,717 in base pay, $210,593 in bonuses and incentives, $65,657 in deferred compensation, $15,265 in nontaxable benefits, and $60,619 in other forms of compensation.

Finances, year 2014:

Profit: $22.1 million, up 25.6 percent from 2013.

Net patient revenue: $188.8 million, up 5.1 percent.

Charity care charges: $10.1 million, down 27.7 percent.

Profit margin: 13.5 percent, compared to 11.7 percent the year before.

Size and scope, as of 2014:

Available beds: 139.

Inpatient days: 25,477.

Emergency department visits: 39,736.

Outpatient visits: 363,223.

St. Anthony Hospital

St. Anthony Hospital in Pendleton was founded in 1901 by the Sisters of St. Francis to provide comprehensive healthcare to community members, regardless of their ability to pay. In 1997, St. Anthony joined CHI.

In late 2013, the hospital moved into a new $74 million building, which kept in-patient capacity the same, but gave patients more privacy and boosted the capacity of the emergency department.

Harry Geller was named St. Anthony’s CEO in mid-2103, but his financial compensation at the hospital is not yet available.

Geller’s predecessor, interim CEO Jim Schlenker, received total compensation of $257,782 for the year: $175,465 in base pay, $42,956 in bonuses and incentives, $18,072 in retirement and deferred compensation, $21,058 in nontaxable benefits and $231 in other forms of compensation.

Finances, year 2014:

Profit: $1.7 million, down 87.2 percent from 2013.

Net patient revenue: $58.2 million, up 16.1 percent.

Charity care charges: $1.9 million, down 32.5 percent.

Profit margin: 3.1 percent, compared to 22.9 percent the year before.

Size and scope, as of 2014:

Available beds: 25.

Inpatient days: 4,359.

Emergency department visits: 12,745.

Outpatient visits: 70,967.

Trinity Health

Trinity Health recently rebranded itself – after the merger of Catholic East and Trinity Health in May 2013, the nonprofit went by CHE Trinity Health. Now the “CHE” is gone from the name, in a branding change that officials at the nonprofit Catholic healthcare giant say reflects their commitment to their faith.

Whatever the name, Michigan-based Trinity is large and growing, with 86 hospitals and hundreds of other health facilities spread across 21 states. With $20.4 billion in assets, it is just slightly smaller than CHI – and in Oregon, its footprint is similar to CHI’s, with each chain operating two hospitals in the state.

Trinity is also the parent company of St. Alphonsus Health Systems, based in Boise-Idaho, which has operations in Oregon and Idaho. St. Alphonsus-Baker City and St. Alphonsus-Ontario were both previously owned by Catholic Health Initiatives. In 2010, CHI handed both hospitals and one in Idaho to the control of Trinity Health.

In 2013, Trinity went through a series of chief executives: Joseph Swedish led from January through March, when he to become CEO of insurance giant Anthem. Swedish was followed by two people who took on the job as interims: Larry Warren in March and April, and Judith Persichilli from April through November. In late 2013, former Center for Medicare and Medicaid Innovation director Richard J. Gilfillan was named CEO of Trinity Health in late 2013, and his executive compensation details at the chain are not yet available.

Swedish's total 2013 compensation was $3.8 million: $1.4 million in base pay, $786,411 in bonuses and incentives, $572,762 in deferred compensation, $28,714 in nontaxable benefits and $1.04 million in other forms of compensation. Warren made $25,000 during his brief time at the helm. Perischilli's total compensation in 2013 was $3.9 million: $1.3 million in base pay, $735,075 in bonuses and incentives, $10,500 in deferred compensation, $7,010 in nontaxable benefits, and $1.9 million in other forms of compensation.

St. Alphonsus Medical Center-Baker City

The institution now known as St. Alphonsus Medical Center-Baker City has deep roots in its eastern Oregon hometown. It was founded as St. Elizabeth Hospital in 1897 with just three nuns on staff operating out of a building they had previously used for other purposes. Over the years, St. Elizabeth moved several times before expanding to its current location in 1970. The hospital was renamed St. Alphonsus Medical Center-Baker City when it became part of Trinity Health subsidiary St. Alphonsus Health Systems.

Hospital CEO Ray Gibbons received total compensation of $311,246 in 2013: $195,585 in base pay, $57,731 in bonuses and incentives, $29,267 in retirement and deferred compensation, $15,430 in nontaxable benefits and $13,233 in other forms of compensation.

Finances, year 2014:

Net loss: $1.03 million, compared to a net loss of $653,287 in 2013.

Net patient revenue: $31.3 million, up 4.2 percent.

Charity care charges: $1.03 million, down 28.8 percent.

Profit margin: Negative 3.2, compared to negative 2.1 the previous year.

Size and scope, as of 2014:

Available beds: 25.

Inpatient days: 8,976.

Emergency department visits: 7,252.

Outpatient visits: 26,235.

St. Alphonsus Medical Center-Ontario:

Ontario’s hospital started as a tent operated by six nuns in 1912, and for nearly a century it went by the name Holy Rosary Medical Center. It was renamed St. Alphonsus Medical Center-Ontario when it

became part of Trinity Health subsidiary St. Alphonsus Health Systems. The hospital serves a four-county region on the west end of Treasure Valley in southwestern Idaho and eastern Oregon.

In early 2014, Richard Palagi left the Ontario hospital, and was replaced by Karl Keeler, who was also CEO of St. Alphonsus Medical Center Nampa, in Idaho. Keeler continues to run both hospitals.

In 2013, the most recent year for which executive pay figures are available, former CEO Palagi received total compensation of $396,692: $246,311 in base pay, $49,380 in bonuses and incentives, $36,635 in retirement and deferred compensation, $20,772 in nontaxable benefits, and $43,593 in other forms of compensation.

Finances, year 2014:

Net loss: $60,930, compared to a net loss of $1.7 million in 2013.

Net patient revenue: $56.8 million, up 0.8 percent.

Charity care charges: $5.5 million, down 2.3 percent

Profit margin: Negative 0.1 percent, compared to negative 2.8 percent the previous year.

Size and scope, as of 2014:

Available beds: 49.

Inpatient days: 7,166.

Emergency department visits: 16,360.

Outpatient visits: 65,822.

- Reach Courtney Sherwood at [email protected], or follow her on Twitter at @csherwood.

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