Hospital Finances: Providence St. Vincent Reports 12.4 Percent Profit Margin

This article is in the first in a series looking at the finances, charity care and executive salaries at Oregon’s acute care hospitals


March 22, 2013 -- Is executive pay fair and appropriate at Oregon hospitals? Has the state’s provider tax made Medicaid into the acute care payer of choice? And just how accurate are the claims that hospitals make about the amount they pay in “charity care,” or healthcare services for the uninsured?

Answering these difficult questions requires first understanding what’s happening at the state’s hospitals – how profitable they are, how many people they serve, and how much they pay their senior executives. Today The Lund Report runs the first in a series of stories that will explore the state of Oregon hospitals in the coming weeks.

The project begins with a review of the state’s acute-care hospitals, assessing how each measures up on a set of key metrics. These stories will look at profits margins, hospital size and reach, the cost of care, and will touch briefly on executive compensation. Click on the Excel spreadsheets that accompany each story for a look at all of the data collected.

The figures underpinning these reviews come from multiple sources:

  • Annual profit, revenue and charity care figures come from reports prepared by each hospital and submitted to the state’s Office for Oregon Health Policy & Research.

  • The size and reach of each hospital, as summarized through staffed beds, and inpatient, outpatient and emergency room figures, are provided by the Oregon Association of Hospitals and Health Systems, which obtains these figures through the state-mandated DATABANK program.

  • Average costs for common procedures are based on Medicare claims data compiled by the American Hospital Directory. Figures listed in this series are the amounts billed by hospitals, not the amounts Medicare ultimately opted to pay.

  • Executive compensation figures come from the IRS 990 tax forms that all nonprofits are required to file.

After completing its look at the facts and figures, The Lund Report will then follow up with stories that tackle difficult questions about profits, compensation and the cost of caring for the poor.

The series starts with a snapshot look at Providence Health & Services and its five Oregon acute-care hospitals.

Providence Health and Services of Oregon


Providence Health and Services is a six-state network of hospitals, clinics and health insurers. System-wide, the nonprofit Catholic health organization reported net revenue of $8.7 billion and profit of $363 million, in 2011. A 2012 merger with Swedish Health Services, which operates in Western Washington, added five new acute-care hospitals to the system.

Providence Health & Services of Oregon, which oversees Providence’s hospitals, clinics and other medical sites in the state, reported $2.44 billion in revenue in 2011, up 7.4 percent from a year earlier. Profits were $1.98 billion in 2011, up 8.1 percent year-over-year. Charity care expenses at Providence’s five Oregon hospitals declined 25.3 percent in 2011, to $149.5 million.

Gregory Van Pelt, CEO of Providence Oregon, had an official base pay of $690,516 in 2011, but his total compensation was actually more than six times higher. According to Providence tax returns, Van Pelt received $2.6 million in bonus and incentive pay. In addition, Providence awarded him another $925,680 in deferred compensation – usually pay an executive collects later, when his or her tax rates are lower. All told, Van Pelt’s 2011 compensation was $4.26 million.

In February Van Pelt said he would retire later this year, and on March 11 Providence named David Underriner to take over. Underriner, currently chief operating officer for Oregon, had total compensation of $863,289 in 2011 -- $393,184 in base pay, $123,464 in bonus and incentive pay, $229,373 in deferred compensation, and $117,268 in other benefits. Providence has not announced how his pay will change as a result of his promotion.

Within the five-state Providence hospital, clinic and insurance system, only Providence Health & Services CEO John Koester made more than Van Pelt in 2011. Koester’s $1.1 million base compensation was bolstered by $3.6 million in bonus and incentive pay and $1.6 million in deferred compensation, bringing his total pay and benefits to $6.4 million in 2011.

Providence Portland Medical Center

Providence Portland hosts the most outpatient visits of any hospital in the state. Long-term plans call for a new medical tower, more medical offices and a sky bridge to connect patients and workers at the sprawling Northeast Portland campus.

Finances, year 2011:

  • Profit: $31.1 million, up 2.5 percent from prior year.

  • Net patient revenue: $607.5 million, up 3.7 percent.

  • Reported charity care charges: $54.9 million, down 24.8 percent.

  • Profit margin: 4.8 percent, down from 4.9 percent in 2010.

Size and scope, as of 2011:

  • Staffed beds: 382.

  • Inpatient days: 103,673.

  • Emergency department visits: 55,377.

  • Outpatient visits: 1,246,792.

Providence St. Vincent Medical Center

Providence St. Vincent sees more inpatient visitors than any other acute care hospital in the state, and staffs the most beds to keep up with that demand. Hospital officials are proud of the recognition they have received, including designation for Excellence in Nursing Services from the American Nurses Credentialing Center. In 2009, St. Vincent was named one of the top 100 hospitals in the U.S. by Thompson Reuters.

Finances, year 2011:

  • Profit: $94.97 million, up 16.3 percent from prior year.

  • Net patient revenue: $749.8 million, up 6.6 percent.

  • Reported charity care charges: $53.8 million, down 23.4 percent.

  • Profit margin: 12.4 percent, up from 11.3 percent in 2010.

Size and scope, as of 2011:

  • Staffed beds: 552.

  • Inpatient days: 129,068.

  • Emergency department visits: 71,008.

  • Outpatient visits: 780,726.

Providence Willamette Falls Medical Center

After several consecutive years of operating losses, Willamette Falls Community Hospital in 2009 merged with the Providence system. Even after the merger, the Oregon City hospital has continued to post net losses.

Finances, year 2011:

  • Net loss: $5.99 million, a deeper loss than the prior year’s $3.3 million.

  • Net patient revenue: $90.7 million, virtually tied with the year before.

  • Reported charity care charges: $7.9 million, down 47 percent from the previous year.

  • Profit margin: negative 6.3 percent.

Size and scope, as of 2011:

  • Staffed beds: 91.

  • Inpatient days: 14,106.

  • Emergency department visits: 28,654.

  • Outpatient visits: 184,101, a 54 percent increase from 2010.

Providence Medford Medical Center

One of two Medford hospitals (the other is Rogue Regional Medical Center), Providence Medford has managed to match its neighbor’s profits despite having far fewer beds. The result: a 9.5 percent profit margin for Providence Medford, compared to a 4.6 percent margin at Rogue Regional.

Finances, year 2011:

  • Profit: $16.2 million, up 36.6 percent from prior year.

  • Net patient revenue: $165.6 million, up 5.9 percent.

  • Reported charity care charges: $21.6 million, down 20.7 percent.

  • Profit margin: 9.5 percent, up from 7.4 percent in 2010.

Size and scope, as of 2011:

  • Staffed beds: 134.

  • Inpatient days: 23,974.

  • Emergency department visits: 25,362.

  • Outpatient visits: 320,499.

Providence Milwaukie Hospital

With 66 staffed beds, Providence Milwaukie is the smallest acute-care hospital in Oregon, and has the fewest inpatient days in this class of hospitals as well. But the Milwaukie hospital remains busy with outpatients and emergency department visits, areas in which it ranks 14th and 13th, respectively, out of 26 hospitals.

Finances, year 2011:

  • Profit: $10.6 million, up 9.8 percent from prior year.

  • Net patient revenue: $93.7 million, up 3.3 percent.

  • Reported charity care charges: $11.3 million, down 19.9 percent.

  • Profit margin: 11.5 percent, up from 10.6 percent in 2010.

Size and scope, as of 2011:

  • Staffed beds: 66.

  • Inpatient days: 9,612.

  • Emergency department visits: 33,098

  • Outpatient visits:212,015

To review the spreadsheet showing the Providence data, click here

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I would like to see how these CEO compensation packages compare to CEO's in general for corporations with comparable net profit or gross revenue. The hospital CEO compensation seemed a bit high. I see that the average CEO compensation for the S&P 500 (includes stock options) was $8.4MM in 2009. I don't think the hospital groups in Oregon would come close to the S&P 500, but their compensation . Source: CEO Pay and the Great Recession, Sarah Anderson, Chuck Collins, Sam Pizzigati, and Kevin Shih. September 1, 2010

To HUDDLEJW and all else - checkout the starting site http;//

There you'll see a nice bar graph for the top execs at Providence as reported in IRS 2009, 2010, 2011.  They can't even see their way to match the measley pay increase of the last five years for most employees of 2% and this year 1.5% - You'll like the comparison....

Non-profit pay... what a way to go. That caring feeling, you know