Oregon’s 16 community care organizations were largely profitable in 2015, with one exception – FamilyCare – posting a small loss that it’s more than able to absorb, according to full-year financial statements published by the Oregon Health Authority. Meanwhile, FamilyCare continues to be embroiled in a lawsuit – now in negotiation -- insisting that its reimbursement rates are insufficient to meet the demand for services.
Meanwhile, these 16 nonprofit and for-profit entities, born out of the Affordable Care Act to provide health access by expanding Medicaid, generally grew financially stronger in 2015. At the end of 2014, several CCOs reported such limited cash on hand that they might not be able to last more than a few days in a crisis – but that’s no longer the case, though some still have a way to go to build strong cash stockpiles.
Click here for a spreadsheet that highlights key financial metrics for the CCOs.
Here’s an up-close look at the state’s CCOs.
AllCare Health Plan
AllCare started as a for-profit physician owned-Medicaid plan in 1996, and was chosen in 2012 to operate as a CCO serving a number of communities in southern Oregon. Based in Grants Pass, it serves Jackson, Josephine and Curry counties, as well as southern Douglas County.
Although AllCare was profitable in 2015, with net income of $3.2 million, the full-year figure hides the big picture. The CCO’s profits were all made in the first half of the year. Its first quarter net income was $5.8 million, and second quarter was $6.5 million. But in the third quarter, AllCare reported a $3.1 million net loss, and in the fourth quarter its net loss was $6 million.
The shift was driven by a drop in net premium revenue, at the same time as the cost of caring for members climbed.
Net premium revenue was $58.2 million in Q1, $57.6 million in Q2, $48.02 in Q3, and $51.2 million in Q4. Member service expenses, which include provider service fees, hospital costs, pharmacy spending, mental health, dental care and other costs, were $43.8 million in Q1, $47 million in Q2, $48.3 million in Q3, $52.8 million in Q4.
Quality incentive pool payments were $6.2 million for the year.
Dividends paid $6 million to stockholders, all of it in the second quarter. An AllCare official said those dividend payments were to the CCO's parent company, and do not reflect profits or payouts to individual investors.
By the numbers:
- 2015 net income: $3.2 million.
- Average monthly medical spending per member: $315.43.
- Average members: 50,705.
- Days of cash on hand: 37.89.
Cascade Health Alliance
Cascade Health Alliance is Klamath County’s CCO, a for-profit, and a subsidiary of Cascade Comprehensive Care, which is comprised of a network of hospitals, doctors and clinics. CCC also administers the ATRIO Medicare health plans.
Cascade Health Alliance was slightly less profitable in the second half of 2015 than in the first half, though its net premium revenue trended upward – but growing spending on medical care also climbed. Its full-year profit was $2.1 million.
Net premium revenue was $17.1 million in Q1, $18.4 million in Q2, $17.2 million in Q3, $24.6 million in Q4. Member service expenses were $14.9 million in Q1, $16 million in Q2, $16.2 million in Q3 and $24 million in Q4.
Quality incentive pool payments were $1.4 million for the year, all paid in the fourth quarter. No dividends were reported.
By the numbers:
- 2015 net income: $2.1 million.
- Average monthly medical spending per member: $369.07.
- Average members: 16,048.
- Days of cash on hand: 94.59.
Columbia Pacific CCO
Columbia Pacific CCO is a nonprofit that serves Clatsop, Columbia and Tillamook counties.
Its profits climbed steadily through the year, despite rising member expenses – with payments from the quality incentive pool making up the difference. The quality incentive pool paid this CCO $7 million for the year: $1.2 million in the second quarter, and $5.8 million in the fourth quarter.
Net income was $490,357 in Q1, $604,244 in Q2, $1.1 million in Q3 and $2.2 million in Q4, for a total of $4.4 million.
No dividends were reported.
By the numbers:
- 2015 net income: $4.4 million.
- Average monthly medical spending per member: 400.92
- Average members: 27,804.
- Days of cash on hand: 21.27
Eastern Oregon CCO
Formed in May 2012, Eastern Oregon CCO is owned half by ODS Community Health (a Moda Health Plan subsidiary) and half by Greater Oregon Behavioral Health Inc., and serves Medicaid members in 12 counties in eastern Oregon. It is administered by GOBHI.
Eastern Oregon CCO made virtually its entire $15.6 million profit in the fourth quarter of 2015. Its first-quarter net income was $1.3 million. In Q2, it reported a net loss of $2.4 million. Q3 net income was $1.5 million, and Q4 net income was $15.1 million.
That spike in profits in the fourth quarter came with a correspondent rapid rise in premium revenue. Net premiums were $55.4 million in Q1, $56.9 million in Q2, $57.6 million in Q3, and then shot up to $84.2 million in Q4.
Meanwhile, second quarter net losses would have been even steeper, but that was the period when Eastern Oregon CCO received its $6.8 million quality incentive pool payment.
No dividends were reported
By the numbers:
- 2015 net income: $15.6 million.
- Average monthly medical spending per member: $391.75.
- Average members: 47,608.
- Days of cash on hand: 69.69.
FamilyCare Inc
FamilyCare Inc. is a nonprofit whose roots go back to 1984. In addition to running a CCO that serves Clackamas, Multnomah, Washington and Marion counties, it also offers six Medicare Advantage plans in the Portland metro area, plus Clatsop, Morrow and Umatilla counties. From its start, FamilyCare has incorporated osteopathic medicine’s whole-body approach to its philosophy of care.
FamilyCare is also in the midst of a dispute with the Oregon Health Authority over its Medicaid disbursements from the state, which says it has over-paid the CCO. In April, a judge ordered the Oregon Health Authority to continue paying the CCO until the dispute is resolved. That lawsuit is now in negotiation.
Though FamilyCare’s operations were profitable in 2015, investment losses left the Portland-area CCO in the red. Including non-operating expenses, it had a net loss for the year of $495,111.
The CCO’s net operating income was actually a positive $11.7 million. But investment losses totaling $12.2 million dragged it into the red.
FamilyCare’s member service expenses, which include provider service fees, hospital costs, pharmacy spending, mental health, dental care and other costs, plummeted in the fourth quarter of the year. The CCO spent $115.8 million on member service expenses in Q1, $134.9 million in Q2, $118.2 million in Q3 and just $67 million in Q4.
The CCO received $31.1 million from the quality incentive pool. No dividends were reported
By the numbers:
- 2015 net loss: $496,117.
- Average monthly medical spending per member: $298.73.
- Average members: 121,611.
- Days of cash on hand: 177.39.
Health Share of Oregon
Health Share of Oregon is a nonprofit founded by a consortium of healthcare organizations and service groups in the Portland metro area. It operates in Clackamas, Multnomah and Washington counties.
The largest CCO in Oregon, its financial situation offers a notable contrast with FamilyCare, second-largest in the state and also centered around the Portland metro area. HealthShare had twice the net premium revenue of Family Care, yet less than a third the assets – and far fewer cash reserves. Yet it was profitable, while FamilyCare reported a small loss last year.
The number of members that HealthShare serves has been dropping: from an average of 242,345 in Q1, down to 235,987 in Q4. Its cash reserves are also among the worst in the state, with only 4.84 days of cash on hand.
This CCO received $21.1 million from the quality incentive pool in 2015. No dividends were reported
By the numbers:
- 2015 net income: $22.6 million.
- Average monthly medical spending per member: $338.41.
- Average members: 241,752.
- Days of cash on hand: 4.84.
Intercommunity Health Network CCO
Intercommunity Health Network CCO is a nonprofit founded in 2012 by a consortium of healthcare groups within the communities it serves in the Willamette Valley and along the mid-Oregon coast. It is administered by Samaritan Health and operates in Benton, Linn and Lincoln counties.
IHN’s cash reserves eroded steadily through the year, which started with $67.9 million in cash and equivalents on hand, and ended with $42.8 million. Cash and equivalents fell by $15.1 million in Q1, by another $466,546 in Q2, and by $4.3 million in Q4, for a cumulative decrease of $25.1 million over the year.
The CCO received $4.3 million from the quality incentive pool No dividends were reported
By the numbers:
- 2015 net income: $19.9 million.
- Average monthly medical spending per member: $353.45.
- Average members: 57,589.
- Days of cash on hand: 114.83.
Jackson Care Connect
Jackson Care Connect was created through a partnership with CareOregon and Jefferson Behavioral Health / Jackson Mental Health, plus a broad scope of other healthcare providers. It only serves Jackson County.
This CCO received $5.8 million from the quality incentive pool in 2015. No dividends were reported.
By the numbers:
- 2015 net income: $9.9 million.
- Average monthly medical spending per member: $329.90.
- Average members: 31,255
- Days of cash on hand: 26.99.
PacificSource Community Solutions – Central Oregon & the Gorge
Eugene-based nonprofit PacificSource operates two coordinated care organizations, one in central Oregon and one in the Columbia River Gorge area, in addition to a traditional private health plan and Medicare offerings. The central Oregon plan is the larger of PacificSource’s two CCOs, with 53,032 members, compared to 12,908 in the Gorge CCO.
Though PacificSource’s two Oregon CCO plans were cumulatively profitable in 2015, taxes took a big chunk out of the bottom line.
The CCOs reported they set aside $9.7 million for taxes during the year. Other non-operating expenses, which are not elaborated on in the annual report, cost $10.7 million. Investment income added back a positive gain of $2.2 million. These non-operating expenses and revenues are responsible for the gap between net operating income of $30.3 million, and total profit – or net income -- of $12.04 million
The CCOs received $5.8 million from the quality incentive pool, and reported no dividends.
By the numbers:
- 2015 net income: $12.04 million.
- Average monthly medical spending per member, central Oregon: $361.78.
- Average members, central Oregon: 53,032.
- Average monthly medical spending per member, Gorge: $312.78.
- Average members, Gorge: 12,908.
- Days of cash on hand: 50.92
PrimaryHealth of Josephine County
PrimaryHealth of Josephine County is a nonprofit founded in 2012 to serve its southern Oregon community as a CCO.
Though it reported a profitable 2015, a closer look shows that profits were all earned in the first half of the year.
The CCO’s net income for the year was $579,736. By quarter, it was $1.5 million in Q1 and $1.6 million in Q2, followed by a net loss of $725,354 in Q3 and a net loss of $1.8 million in Q4.
Spending on member services climbed each quarter of last year, from $9.96 million in Q1, to $11.7 million in Q2, to $13.1 million in Q3, to $13.8 million in Q4, adding up to $48.655 across the full year.
PrimaryHealth’s cash on hand declined significantly over the course of the year. At the end of the first quarter, it had 57.26 days of cash on hand. By the end of the year, that was down to 17.25 days of cash on hand.
It received $1.6 million from the quality incentive pool. No dividends were reported.
By the numbers:
- 2015 net income: $579,736.
- Average monthly medical spending per member: $345.20.
- Average members: 11,736.
- Days of cash on hand: 17.25.
Trillium Community Health Plan
Trillium Community Health Plan is a for-profit that was already incorporated as an insurance company before it became a CCO, so it is licensed by both the Oregon Health Authority and the Department of Consumer and Business Services, which houses the state’s Insurance Division. It is owned by St. Louis-based Centene Corp., a Fortune 500 company.
Under this arrangement, Trillium files National Association of Insurance Commissioner reports with insurance and CCO regulators, rather than the financial documents submitted by the other CCOs. As a result, the financial figures available for Trillium are slightly different, and per member per month healthcare spending is not available.
Trillium received a $30.4 million DHS transformation grant.
Any quality incentive pool payments it may have received were not disclosed on the form Trillium filed with the state. It paid $22.2 million in dividends to stockholders.
By the numbers:
- 2015 net income: $14.7 million.
- Average monthly medical spending per member: Not available.
- Average members: 87,845.
- Days of cash on hand: Not available.
Umpqua Health Alliance
Though it does business as the Umpqua Health Alliance, this Douglas County-focused CCO is a for-profit legally incorporated under the name DCIPA LLC. It’s owned by Architrave Health LLC, which in turn is owned by Mercy Medical Center and medical practitioners within the region.
Revenue from premiums declined each quarter of 2015 at Umpqua Health Alliance: from $33.5 million in Q1, to $30.7 million in Q2, to $26.9 million in Q3, to $25.2 million in Q4. But the CCO was able to rein in medical spending when premiums dropped to remain profitable each quarter. Net income for the full year was $10.8 million.
The CCO received $4.5 million in quality incentive pool payments. No dividends were reported.
By the numbers:
- 2015 net income: $10.8 million.
- Average monthly medical spending per member: $323.38.
- Average members: 26,248.
- Days of cash on hand: 84.4.
Western Oregon Advanced Health
Created in 2012 to serve Coos County and northern Curry County, Western Oregon Advanced Health is run by a consortium of doctors along the Oregon coast. The for-profit company also owns South Coast Technical Innovations, a grant-funded business developing electronic record systems.
WOAH reported the highest per-member medical costs in the state, spending $431.24 on medical expenses per member each month.
It received $3.4 million in quality incentive pool payments. The CCO reported paying $495,126 in dividends to stockholders
By the numbers:
- 2015 net income: $1.4 million.
- Average monthly medical spending per member: $431.24.
- Average members: 19,652.
- Days of cash on hand: 19.85.
Willamette Valley Community Health LLC
Willamette Valley Community Health was organized in 2012 to serve Marion and Polk counties. It is a for-profit, but is owned by mutual-benefit nonprofit Mid Valley IPA, a physicians and healthcare providers group, which runs WVCH very much like a nonprofit group, with a local board and local advisory groups.
It reported just 12 days of cash on hand at the end of 2015 – down from 21 days of cash on hand at the end of the previous year.
The CCO received $6.06 million in quality incentive pool payments. No dividends were reported.
By the numbers:
- 2015 net income: $12.7 million.
- Average monthly medical spending per member: $319.83.
- Average members: 104,003.
- Days of cash on hand: 12.15.
Yamhill Community Care Organization
Created in 2012 to serve Yamhill and parts of Clackamas, Washington, Polk, Marion and Tillamook Counties, Yamhill Community Care Organization is a registered nonprofit.
Yamhill CCO received $5.4 million in quality incentive pool payments. No dividends were reported.
By the numbers:
- 2015 net income: $6.9 million.
- Average monthly medical spending per member:$345.42.
- Average members: 24,826.
- Days of cash on hand: 72.23.
Reach Courtney Sherwood at [email protected] or follow her on Twitter at @csherwood.
Editor's note: Transcription errors led to several incorrect net income figures in an earlier version of this story. The broad trends described are unchanged, but incorrect figured have been corrected and updated.
