Hospital Finances Flashback: OHSU and VA Hospitals

OHSU reports highest revenue of any Oregon hospital, likely a reflection of several factors: because of its affiliations with researchers and academics, it provides a disproportionate share of complex, high-cost treatments.

This is from The Lund Report's 2014 look at hospitals. It has been re-printed as we revisit these hospitals in 2015. The most recent report is available to premium subscribers.

The most profitable hospital in Oregon is also the only state-owned hospital here: Oregon Health & Science University. Yet despite a hospital profit of nearly $103 million and net patient revenue of $1.1 billion, OHSU’s leaders are not the best paid healthcare executives in Oregon.

Including taxes, benefits and retirement pay, the men who oversee the entire OHSU system, and its research hospital, each made under $1.5 million in total compensation in 2013 – roughly in line with the head of Providence Health and Services ($1.6 million in 2012, according to the most recent figures available) and less than Legacy Health (whose top leader received $1.8 million in total compensation in 2012).

This story is the ninth in a series of articles in which The Lund Report aims to examine more than 50 hospitals licensed to operate in the state.

These stories look at profit margins, hospital size and reach, and touch briefly on executive compensation. In the first eight stories in the series, we’ve profiled hospitals operated by chains including Providence, Legacy Health,PeaceHealth, Samaritan Health Services, St. Charles Health, Adventist, Catholic Health Initiatives and CHE Trinity Health. Most of these institutions have a deep reach in Oregon and religious origins. We’ve also profiled hospitals run by secular nonprofits Asante, Kaiser Permanente and Salem Health. Part eight in the series looked at ten small hospitals – some that are still independent, and others that have chosen to join larger chains.

Today we dig into three publicly run hospitals in the state: OHSU Hospital, and Veterans Affairs programs based in Portland and in Roseburg.

The next stories in the series will begin to look into hospitals operated by taxpayer-funded public health districts.

The figures underpinning these hospital snapshots come from multiple sources, including state reports, tax filings and public records requests. Click the accompanying spreadsheets (here and here) to view the figures we’ve compiled. Beginning in late June, The Lund Report will follow up with stories that tackle difficult questions about the effects of healthcare reform on Oregon’s hospitals, the growing pressure on independent hospitals to merge, and the changing status of hospital care in Oregon.

Oregon Health & Science University

Oregon Health & Science University is a state-chartered public corporation, a medical, nursing, dental and pharmacy school, a network of clinics, a center for research and a major employer – with 13,984 employees (down about 200 from a year ago). Across the entire system, OHSU’s 2012 operating budget was $2.06 billion

Today’s OHSU grew out of multiple separate endeavors: its progenitors include a medical school founded at Salem's Willamette University back in 1867, a Portland-based University of Oregon medical school founded in 1887, two separate dental programs started in the late 1890s, and a number of other hospitals and clinics established over more than a century. In 1974, the descendants of these programs were combined into the single University of Oregon Health Sciences Center, which was renamed Oregon Health Sciences University in 1981. OHSU got its current name, Oregon Health & Science University, on July 1, 2001, when it merged with the Oregon Graduate Institute of Science and Technology – a combination approved by the state Legislature and signed into law by the governor.

OHSU’s reach can be felt across the state –it has campuses in Ashland, Klamath Falls, La Grande and Monmouth. But by the early 2000s, the institution’s main 166-acre campus on Portland’s Marquam Hill was running out of room for growth. To keep growing in the city, it established a second campus in Portland’s South Waterfront, where OHSU’s Center for Health and Healing opened in 2006, and construction continues today. An aerial tram connects the two major Portland campuses.

Dr. Joe Robertson, an ophthalmologist who has spent nearly his entire career at OHSU, was named the institution’s president in 2006. He received total compensation of about $1.5 million in OHSU’s 2013 fiscal year, according to figures provided to The Lund Report following a public information request. Not all of that was take-home pay. Here’s how Robertson’s compensation broke down: He received $972,877 in base pay, $138,743 in clinical pay, $182,223 in incentive pay, $9,790 in benefits, a $45,000 expense allowance,$129,750 in retirement benefits, and other one-time compensation of $521. Robertson’s retirement compensation sets him apart from most other healthcare executives in the state, because he is a participant in Oregon’s Public Employees Retirement System. A large portion of Robertson’s reported retirement benefit was actually the cost OHSU paid to PERS toward his pension, a spokeswoman said.

OHSU Hospital

OHSU Hospital, Oregon Health & Science University’s main inpatient facility, is one of the busiest hospitals in the state. It ranks No. 3 for both inpatient visits and outpatient visits (behind Providence Portland and Providence St. Vincent in both cases), and has the most staffed beds in Oregon. About a quarter of those beds are set aside for pediatrics.

OHSU also reported the most revenue of any Oregon hospital, likely a reflection of several factors: because of its affiliations with researchers and academics, it provides a disproportionate share of complex, high-cost treatments.

Peter Rapp, executive vice president of OHSU, is responsible for the hospital’s daily operations. In response to Lund Report queries, OHSU has agreed for the first time to disclose Rapp’s full compensation, including bonuses. In fiscal year 2013, Rapp’s total compensation was $1.4 million. Here’s how it breaks down: $624,387 in base pay; $116,391 in incentive pay; $624,487 in bonuses; $10,590 in benefits; $38,556 in retirement. As with Robertson, much of Rapp’s retirement compensation was actually paid to PERS as a contribution to his pension.

OHSU Hospital finances, year 2012:

Profit: $102.98 million, up 46.2 percent from 2011.

Net patient revenue: $1.1 billion, up 8.6 percent from.

Reported charity care charges: $72.7 million, down 4.3 percent.

Profit margin: 8.6 percent, compared to 6.6 percent a year earlier.

Size and scope, as of 2012:

Available beds: 539.

Inpatient days: 159,068.

Emergency department visits: 36,806.

Outpatient visits: 812,379.

Veterans Affairs Hospitals

The U.S. government's Veterans Affairs health system is required by law to provide eligible veterans with needed hospital care and outpatient services, but its health system has come under fire recently for long wait times. In some cases, people have died waiting to see a doctor. President Obama says people "will be held accountable" for covering up the delays.

Because VA programs are federally run and organized, they do not submit data to Oregon agencies. As a result, the statistics most Oregon hospitals report about financial performance and size and scope are not available for VA hospitals.

VA Portland

Headquartered adjacent to OHSU’s main campus, the Portland VA Medical Center has 277 beds and serves 80,000 veterans from Oregon and Southwest Washington each year.

In addition to its hospital in Portland, the Portland VA Medical Center is the heart of a network of nine outpatient clinics across central and northwest clinic, and oversees a campus in Vancouver, Washington, The Portland VA also partners with OHSU on research and training.

VA Roseburg

The VA's Roseburg Healthcare System includes a 200-acre, 32-building campus, including a hospital, as well as four clinics within the region. The VA Roseburg Healthcare System offers primary care and hospital services to 62,000 veterans from central and southern Oregon, as well as Northern California.

Members of the Douglas County Veterans Forum have called on Roseburg VA clerks to testify in court about patient wait times, though the VA says its own audit has found wait times to be reasonable there, according to the Roseburg News-Review newspaper.

Courtney Sherwood can be reached at [email protected]. Follow her on Twitter at @csherwood.

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