Legacy Health is best known for its hospitals, but a financial review of the Portland-based nonprofit healthcare system that only looks at those hospitals is missing a big part of the picture. Laboratory services, Legacy’s system office, and a surgery center are among the business entities that the nonprofit tracks separately from its hospitals – and those don’t include the goliath, Legacy Medical Group, through which more than 300 physicians and other providers are employed by Legacy.
Legacy Medical Group includes almost 100 hospitalists and costs the Legacy Health system $41.9 million to its bottom line – all of which would be overlooked in a review of Legacy’s hospitals. (Still other providers are employed directly by hospitals, and included in those hospitals’ financial reports.)
This week, The Lund Report continues its examination of leaked internal Legacy documents by looking at the health system’s non-hospital operations.
The documents cover Legacy operations from April 1-Sept. 30 – the first half of the nonprofit’s fiscal year. As previously reported by The Lund Report, on Sept. 20, Legacy Health had $2.02 billion in assets, including $68.9 million in cash and equivalents. At the end of the previous fiscal year six months earlier, it had $2.08 billion in assets, and $100 million in cash and equivalents.
In earlier stories, The Lund Report examined the financial considerations underpinning Legacy’s negotiations to create a joint venture with insurance company PacificSource. Click HERE and HERE to read that reporting. We also looked at the finances of Legacy’s hospitals. Click HERE for that story.
Here’s what the documents reveal about Legacy’s non-hospital divisions.
Legacy Medical Group, April 1-Sept. 30:
With 300 health providers on its payroll, Legacy Medical Group includes almost 100 hospitalists and costs the Legacy Health system $41.9 million to its bottom line – all of which would be overlooked in a review of Legacy’s hospitals. Still other providers are employed directly by hospitals, and included in those hospitals’ financial reports.
- Patient visits: 424,069, 98% percent more than expected in Legacy’s budget.
- Paid FTEs: 1,114, whereas Legacy budgeted for 1,126.
- Total operating expense per visit: $252.
- Payer mix: 36% Medicare, 27% Medicaid, 35% commercial, 1% self-pay.
- Net income: Negative $41.96 million.
Legacy Laboratory Services, April 1-Sept. 30:
An independent reference lab, Legacy Laboratory Services says on its website that it supports “the testing needs of patients, physicians, hospitals, employers, independent physicians associations and other businesses through our patient service locations across the Portland-Vancouver area, Eugene and the
Oregon Coast.” It conducts everything from pre-employment drug screenings for employers to tests for cholesterol or the flu in patient samples.
- Paid FTEs: 545, whereas Legacy budgeted for 560.
- Total operating expense per billed text: $16.12.
- Payer mix: 22% Medicare, 12% Medicaid, 65% commercial, 1% self-pay.
- Net income: $3.8 million.
Smaller divisions
Legacy provides fewer details about its smaller divisions in the documents obtained by The Lund Report, which list four other offices within the Legacy Health family. Here’s the net income of each of those offices from April 1-Sept. 30:
- Legacy Visiting Nurse Association, April 1-Sept. 30: Net income: $35,000.
- Legacy System Office April 1-Sept. 30: Net income: $4.8 million.
- LHS USP Surgery Center, April 1-Sept. 30: $1.4 million.
- Eliminations & Others, April 1-Sept. 30: Net income: Negative $3.5 million.
The documents do not explain the work of each of these divisions, but in some cases that information is online or through other documents.
According to nonprofit tax filings, the Legacy Visiting Nurse Association is a hospice group that operates the 15-bed Hopewell House and that also runs in-home hospice offerings.
The Legacy System Office provides administrative support to Legacy’s other divisions – but is generally not involved with direct patient care.
It’s not entirely clear what the “LHS USP Surgery Center” refers to. “USP” is common shorthand for United Surgical Partners International, which does have three surgery centers in Oregon – and a United Surgical Partners filing with the U.S. Securities and Exchange Commission refers to a “Legacy/USP Surgery Centers LLC” subsidiary based in Oregon. State business records do not give a local address for the company.
It’s also unclear what Legacy is referencing under “eliminations and others.” In financial dictionaries, “intercompany eliminations” are sometimes used to account for internal transactions between a company’s subsidiaries – to avoid double-counting, for example.
Courtney Sherwood can be reached at [email protected]. Follow her on Twitter at @csherwood
