A Look at 2014 Finances: OHSU and the VA Medical Center

OHSU reports highest revenue, profit of any Oregon hospital, as its status as an academic and research leader sets it apart

Oregon Health & Science University plays an outsized role in the state’s healthcare world, so perhaps it’s little surprise that OHSU’s hospital is the most profitable, one of the busiest, and reports the highest revenue in Oregon.

This is the tenth story in The Lund Report’s 2015 review of Oregon hospital finances. Today we’re looking at two large organizations with government backing: Oregon Health & Science University’s OHSU Hospital, which is a state-chartered institution, and the federally run VA Portland hospital.

For the third year, The Lund Report is digging into the money and operations of these major healthcare institutions. In our first nine stories, we looked at nearly every hospital in the state. Later this year, we will build on the reporting in these stories to examine board compensation, hospital consolidation and other pressures shaping the industry.

Our earlier articles in this series examined Providence Health and Services, Legacy Health, Kaiser Permanente, Salem Health, Asante, Samaritan Health, St. Charles Health System, and PeaceHealth, and hospitals operated by Adventist Health, by Catholic Health Initiatives and by Trinity Health. We also looked into independent hospitals, including Columbia Memorial, Good Shepherd, Grande Ronde, Santiam, Sky Lakes, and for-profits McKenzie-Willamette and Willamette Valley and Oregon’s public health districts -- Bay Area, Blue Mountain, Coquille Valley, Curry General, Harney District, Lake District, Lower Umpqua, Pioneer Memorial, Southern Coos and Wallowa Memorial.

The figures underpinning these hospital snapshots come from multiple sources:

  • Profit, revenue and charity care figures come from audited reports prepared by each hospital and submitted to the Office for Oregon Health Policy & Research.
  • The size and reach of each hospital, as summarized through available beds, and inpatient, outpatient and emergency room figures, are reported by hospitals to the state-mandated Databank program.
  • OHSU compensation figures were released following a request for public information.

We’re also reading reports the hospitals put out themselves, and digging into other public records.

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 2014 operating budget was about $2.2 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.

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. An aerial tram connects the two major Portland campuses.

It’s also a major medical school and research institution. In June, OHSU announced it had raised $1 billion to support a large-scale program dedicated to early detection of lethal cancers; half of the funding came from Nike co-founder Phil Knight and his wife Penny Knight.

While OHSU only runs one hospital today, that could soon change. Recently it announced plans to develop an affiliation with Salem Health and Tuality Health by creating a management company, OHSU Partners, to operate clinical operations of its partners.

Dr. Joe Robertson, an ophthalmologist who has spent nearly his entire career at OHSU, has been the institution’s president since 2006. Robertson's total compensation in fiscal year 2015, which ended this June, was $1.6 million, according to OHSU staff: $1 million base pay; $158,301 clinical pay; $240,474 incentive pay; $11,206 benefits; $123,635 retirement; $48,750 expense allowance. Click the attached spreadsheet to compare Robertson’s 2015 pay with prior years’ compensation, and to review other OHSU compensation details.

OHSU Hospital

OHSU Hospital, Oregon Health & Science University’s main inpatient facility, is the state’s only academic medical center, and is one of the busiest hospitals in the Oregon. It’s also the most profitable, by a wide margin, reporting net income (another term for profit) of $116.3 million in 2014. (No. 2, PeaceHealth Sacred Heart-Riverbend, reported net income of $95.5 million.)

And OHSU ranks No. 2 most charitable, providing $69.7 million in uncompensated charity care to patients who could not afford to pay in 2014 – though that figure was down 20.7 percent from the previous year, as Affordable Care Act reforms boosted the number of people in the state able to pay for their health care. (Legacy Emanual Medical Center ranked No. 1 for charity care, spending $71.8 million in that category.

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. Rapp’s total compensation in the fiscal year that ended June 30, 2015, was $989,959, according to OHSU staff: $658,553 base pay; $12,373 benefits; $156,556 incentive pay; $37,477 retirement; and a retention bonus of $125,000

Finances, year 2014:

Profit: $116.3 million, up 33.4 percent.

Net patient revenue: $1.29 billion, up 9.1 percent.

Charity care charges: $69.7 million, down 20.7 percent.

Profit margin: 8.5 percent, compared to 7.0 percent the prior year.

Size and scope, as of 2014

Available beds: 551.

Inpatient days: 162,281.

Emergency department visits: 37,145.

Outpatient visits: 858,241.

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 came under significant fire last year for long wait times.

As of this month, the VA’s number of backlogged veterans claims dipped below 100,000 – with a “backlog” defined as a claim that takes more than 125 days. About 360,000 claims are awaiting action, half the level of two years ago.

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 Medical Center

Headquartered adjacent to OHSU’s main campus, the Portland VA Medical Center has 277 beds and serves 85,000 veterans from Oregon and Southwest Washington each year. In addition to its Portland hospital and a Vancouver campus, the VA Portland also operates in 10 outpatient clinics across Oregon.

The VA Portland also partners with OHSU in research and training.

Joanne M. Krumberger was appointed director of the VA Portland health system in May 2014.

VA Roseburg Healthcare System

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 offers primary care and hospital services to 62,000 veterans from central and southern Oregon, as well as Northern California.

Doug Paxton, director of the Roseburg VA since May, told the Roseburg News-Review newspaper that one of his top priorities is reducing wait times and increasing transparency of the VA's operations.

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

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