Hospital Finances: A Look at OHSU, Kaiser, Adventist and Tuality

All of Kaiser's hospitals walked away with the highest profit margin in 2011 followed by OHSU Hospital and Adventist Medical Center, while Tuality Community Hospital ended up in the red

April 5, 2013 -- This story is the fourth in a series that is examining the state of Oregon hospitals. Today, the Lund Report looks at OHSU Hospital, Kaiser Sunnyside Medical Center, Adventist Medical and Tuality Community Hospital.

Earlier stories in the series covered:

The hospitals under review by The Lund Report each pay a 4-percent-of-net-revenue tax not charged to other healthcare organizations in Oregon. In exchange they receive higher Medicaid reimbursements through the Oregon Health Authority. Later in this series, The Lund Report will examine that arrangement and will look deeper at hospital profits, executive compensation and the cost of caring for the poor.

OHSU Hospital

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 14,185 people on its payroll at last count. OHSU Hospital, the organization’s main inpatient facility, hosts more days of inpatient care than any other in the state. It also ranks No. 2 for staffed beds (behind Providence St. Vincent) and No. 3 for outpatient visits (behind Providence Portland and St. Vincent).

Dr. Joe Robertson, president of the entire OHSU system, had official base pay of $925,517, in 2011, but add in bonuses and other sources of income and his compensation was much higher. According to tax returns filed by OHSU-affiliated nonprofits, Robertson received $73,255 in deferred compensation – usually pay an executive collects later, when his or her tax rates are lower. He also received $76,660 in bonuses, $1,274 in non-taxable benefits, and $15,000 in other forms of pay. Add it all up, and his total compensation was $1,091,706.

The salary for Peter Rapp, executive director of OHSU’s hospitals and clinics, is trickier to break down. Because he was not paid by nonprofits affiliated with the healthcare group in recent years, his pay was not disclosed on IRS filings. According to an OHSU spokesman, however, Rapp’s base salary was $606,000 in 2012, and he received $116,000 in incentive pay that year.

OHSU Hospital finances, year 2011:

  • Profit: $70.4 million, down 6.1 percent from 2010.

  • Net patient revenue: $1.03 billion, up 4 percent.

  • Reported charity care charges: $75.9 million, up 4 percent.

  • Profit margin: 6.6 percent, compared to 7.1 percent a year earlier.

Size and scope, as of 2011:

  • Staffed beds: 536.

  • Inpatient days: 154,705.

  • Emergency department visits: 37,078.

  • Outpatient visits: 772,089.

Kaiser Sunnyside and its other hospitals

Kaiser Sunnyside is unique among hospitals in Oregon. While each of the other 26 acute-care hospitals reviewed in this series reports audited financial data to the state Office for Oregon Health Policy & Research, Kaiser’s parent company says it cannot break those figures out. Instead, Kaiser Permanente – an integrated insurance company and network of healthcare providers – tracks the finances for 38 hospitals as one single entity. The majority of those hospitals are located in California, with some facilities in Hawaii, and with Kaiser Sunnyside Medical Center based in Clackamas, Oregon. The broad snapshot reveals that Kaiser’s hospitals collectively saw profits climb 12 percent from 2010 to 2011, reaching $1.5 billion, but it’s not clear what role Kaiser Sunnyside may have played in that increase.

George Halvorson, chairman and CEO of the entire national Kaiser Permanente system, received total compensation of $7,936,510 in fiscal year 2011. The breakdown: $1,215,613 in base pay, $5,039,506 in bonuses, $61,308 in deferred compensation, $13,287 in nontaxable benefits and $1,606,796 in “other compensation,” which Kaiser does not define.

Andrew McCulloch, regional president for Kaiser of the Northwest, received base pay of $388,769, bonuses of $354,518, deferred compensation of $204,811, nontaxable benefits of $14,672 and “other compensation” amounting to $75,624. Added up, his total remuneration for 2011 was $1,038,394.

All 38 Kaiser Foundation Hospitals finances, year 2011:

  • Profit: $1.5 billion, up 12 percent from 2010.

  • Total program service revenue: $17.2 billion, up 7.9 percent.

  • Reported charity care charges: $244.3 million, up 7 percent.

  • Profit margin: 8.5 percent, compared to 8.3 percent a year earlier.

Size and scope of Kaiser Sunnyside Medical Center, as of 2011:

  • Staffed beds: 269.

  • Inpatient days: 70,984.

  • Emergency department visits: 42,320.

  • Outpatient visits: 52,964.

Adventist Medical Center

Adventist Medical Center in Portland is part of a network of faith-based organizations founded on Seventh-day Adventist values. Adventist Health Northwest oversees the southeast Portland hospital and a clinic that serves an estimated 900,000 people in east Portland and the city’s suburbs. Adventist Health Corporate is based in Roseville, Calif., with a network of 18 hospitals and numerous clinics across California, Hawaii, Washington and Oregon.

In fiscal year 2011, Adventist Health Northwest President Robert Carmen received $934,340 in base pay, a $267,209 bonus, $18,150 in deferred compensation and $21,654 in nontaxable benefits. He also received $547,748 described as “other compensation” on the nonprofit’s tax form for the year, bringing his total remuneration to $1,789,101.

Adventist Medical Center President Thomas Russell, who oversees the Portland hospital, received total compensation of $554,969 -- $364,687 in base pay, $83,794 in deferred compensation, $19,218 in nontaxable benefits and $87,269 in other forms of compensation.

Russell’s predecessor also continued to receive income from Adventist Medical Center, even though he retired in 2008. Deryl Jones, formerly president of the hospital, received $60 in deferred compensation, $8,590 in nontaxable benefits and $1,782,626 in “other compensation,” according to Adventist tax forms.

Adventist Medical Center finances, year 2011:

  • Profit: $6.6 million, up from 2010’s razor-thin $381,240.

  • Net patient revenue: $267.5 million, up 9.2 percent.

  • Reported charity care charges: $19.5 million, down 11.4 percent.

  • Profit margin: 2.2 percent, compared to 0.14 percent in 2010.

Size and scope, as of 2011:

  • Staffed beds: 248.

  • Inpatient days: 43,450.

  • Emergency department visits: 48,548.

  • Outpatient visits: 429,109.

Tuality Community Hospital

Tuality Healthcare is a nonprofit that runs a small health insurance plan, a health education center and two hospitals, located in Forest Grove and Hillsboro. Tuality Community Hospital of Hillsboro, the larger of the two, is among the “diagnosis-related group” facilities being reviewed in this series. Founded in 1918, today Tuality Community Hospital maintains partnerships with OHSU and Pacific University.

Richard Stenson, president and CEO of the entire Tuality Healthcare system, received total compensation in 2011 of $405,293 -- $342,793 in base pay, $24,000 in deferred compensation and $38,500 in nontaxable benefits.

Manny Berman, who oversees Tuality Community Hospital as administrator and chief operating officer, received base pay of $186,915 in FY 2011. He also received nontaxable benefits of $43,929, bringing his total compensation to $230,844.

Tuality Community Hospital finances, year 2011:

  • Net loss: $5.8 million, compared to a $3.7 million profit in 2010.

  • Net patient revenue: $170.8 million, down 1.4 percent from a year earlier.

  • Reported charity care charges: $9.4 million, up 0.8 percent.

  • Profit margin: Negative 3.3 percent, compared to positive 2.1 percent in 2010.

Size and scope, as of 2011:

  • Staffed beds: 149.

  • Inpatient days: 22,829.

  • Emergency department visits: 38,775.

  • Outpatient visits: 263,328.


To review the financial data for these hospitals, click here

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