A Look Back: Samaritan Health’s Finances Improve as ACA Reduces Charity Care Costs

Financial filings also show a CEO whose total compensation is more than that of his next-best-paid executive

In the final year before Affordable Care Subsidies drastically expanded health insurance enrollment across Oregon, the costs of covering the health needs of the uninsured took a major financial bite for one of the state’s major healthcare providers. But that all began to change last year.

Samaritan Health Services, which operates in the mid-Willamette Valley and along the central Oregon coast, saw charity care spending climb 13.1 percent across its five hospitals in 2013. For years, charity care – the term hospitals assign to the medical bills they voluntarily forgive when poor or low-income patients are unable to pay – was a major financial burden at healthcare organizations across the state.

The Affordable Care Act appears to have resoundingly reversed that trend at Samaritan, according to newly available full-year 2014 hospital information. In 2013, Samaritan’s five hospitals spent $46.5 million on charity care. In 2014, they spent $20.5 million on charity care – a 55.98 percent drop.

These are among the findings of this fourth story in The Lund Report’s 2015 review of Oregon hospital finances.

For the third year, The Lund Report is digging into the money and operations of Oregon’s hospitals. In our first three stories, we examined Providence Health and Services, Legacy Health, Kaiser Permanente, Salem Health and Asante. For this story, we’re looking at Samaritan Health.

The figures underpinning these examinations 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.

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

• Additional financial details about hospital chains come from IRS 990 forms and from the systems’ own unaudited reports.

In addition, The Lund Report is reviewing Medicare claims data from the American Hospital Directory and hospital debt information from bond databases.

Once we’ve completed our look at the facts and figures, The Lund Report will follow up with stories that tackle different questions about profits, compensation and the cost of caring for the poor.

This review of Samaritan’s hospitals draws from the most recent available data. With executive compensation figures, that means we are relying on 2013 tax forms. But this story is the first in this ongoing series to also draw on newly available 2014 financial figures reported to the state, which were released after The Lund Report had already launched its look into Oregon hospital finances. In future stories, we’ll dig deeper to see what the 2014 figures reveal about the early implementation of the Affordable Care Act.

Next week, we’ll look at hospitals in the St. Charles Health System network.

Samaritan Health Services

Samaritan Health Services serve the mid-Willamette Valley and central Oregon Coast with hospitals, clinics and senior living centers. The Corvallis-based nonprofit was founded in 1997 when Mid-Valley Healthcare and Samaritan Inc. merged in an effort to more effectively and efficiently serve their communities. Over the years other organizations have joined Samaritan Health, which now operates five hospitals – two on behalf of public districts - and also runs a coordinated care organization known as InterCommunity Health Network.

Samaritan Health President and CEO Larry A. Mullins saw his total compensation drop 6.76 percent in 2013, although his base pay actually went up 2.3 percent. His 2013 compensation package, worth $1.4 million, breaks down as follows: $600,887 in base pay, $75,000 in bonuses and incentives, $246,627 in retirement and deferred compensation, $24,104 in nontaxable benefits, and $516,932 in other compensation.

Mullins base pay was more than double that of the next-best paid employee of the Samaritan Health system – Steve Jasperson. Including benefits, bonuses and other forms of remuneration, Mullins’ total compensation was more than triple that of his next-best compensated colleague.

Good Samaritan Regional Medical Center

The largest hospital serving Linn, Benton and Lincoln counties, Corvallis-based Good Samaritan Regional Medical Center employed more than 2,200 full-time, part-time and temporary workers through the course of 2013.

Steven Jasperson was CEO of Good Samaritan at the start of 2013, but midway through the year he was reassigned to head Samaritan Health’s Southern California operations, and Larry Mullins, chief executive of the entire system, took on oversight of the Good Samaritan Hospital.

Mullins’ executive compensation is outlined above. Jasperson’s total compensation in 2014 was $479,349: $387,111 in base pay, $20,952 in retirement and deferred compensation, $22,889 in nontaxable benefits, and $48,397 in other forms of compensation.

Finances, year 2014:

Net loss: $6.4 million, compared to a net loss of $11.1 million in 2013.

Net patient revenue: $312.3 million, up 2.1 percent.

Reported charity care charges: $7.1 million, down 70.7 percent.

Profit margin: Negative 2 percent, compared to negative 3.49 percent a year earlier.

Size and scope, as of 2014:

Available beds: 188.

Inpatient days: 42,980.

Emergency department visits: 20,561

Outpatient days: 168,938.

Samaritan Albany General Hospital

Though relatively small, Samaritan Albany Hospital employed more than 1,000 full-time, part-time and temporary employees over the course of 2013. It serves a population that is, on average, both older and sicker than most of Oregon.

Samaritan Albany CEO David Triebes received total compensation of $368,545 in 2013: $295,860 in base pay, $20,952 in retirement and deferred compensation, $28,264 in nontaxable benefits, and $48,397 in other forms of compensation.

Finances, year 2014:

Profit: $5.1 million, compared to a $3.2 million net loss in 2013

Net patient revenue: $154.5 million, up 7.5 percent.

Reported charity care charges: $4.6 million, down 51.6 percent.

Profit margin: 3.1 percent, compared to negative 2.08 a year earlier.

Size and scope, as of 2014:

Available beds: 79.

Inpatient days: 10,026.

Emergency department visits: 23,903.

Outpatient visits: 123,686.

Samaritan Lebanon Community Hospital

Started as a 50-bed acute-care hospital in 1952, Samaritan Lebanon Community Hospital was converted to a smaller 25-bed critical access hospital in 2005. It serves small towns in east Linn County, including Lebanon, Sweet Home and Brownsville.

Samaritan Lebanon CEO Becky Pape, who is also chief operating officer of the Good Samaritan Hospital, received total compensation in 2013 of $361,897: $261,299 in base pay, $20,000 in bonuses and incentives, $20,952 in retirement or deferred compensation, $29,282 in nontaxable benefits and $30,364 in other compensation.

Finances, year 2014:

Profit: $2.3 million, compared to a net loss of $570,490 in 2013.

Net patient revenue: $88.2 million, up 13.5 percent.

Reported charity care charges: $3.7 million, down 32.4 percent.

Profit margin: 2.5 percent, compared to negative 0.67 percent a year earlier.

Size and scope, as of 2014:

Available beds: 25.

Inpatient days: 5,486.

Emergency department visits: 17,239.

Outpatient visits: 94,936.

Samaritan North Lincoln Hospital

In 2001, North Lincoln Health District contracted with Samaritan Health to run its hospital. Since then, it has been known as Samaritan North Lincoln Hospital, under an agreement that continues through 2030. Based in Lincoln City, the hospital employed about 400 full-time, part-time and temporary workers in 2013, and delivered 139 babies that year.

Hospital CEO Joseph “Marty” Cahill, who is also chief operating officer of the chain’s Lebanon Hospital, received total compensation in 2013 of $205,222: $166,220 in base pay, $12,459 in retirement and deferred compensation, $25,827 in nontaxable benefits, and $716 in other compensation.

Finances, year 2014:

Profit: $572,438, up 6.4 percent from 2013.

Net patient revenue: $45.7 million, up 6 percent.

Reported charity care charges: $2.3 million, down 15 percent.

Profit margin: 1.2 percent, compared to 1.16 percent a year earlier.

Size and scope, as of 2014:

Available beds: 25.

Inpatient days: 3,495.

Emergency department visits: 9,238.

Outpatient visits: 51,923.

Samaritan Pacific Communities Hospital

In 2002, Pacific Communities Health District contracted with Samaritan Health to run its hospital. Since then, it’s been known as Samaritan Pacific Communities Hospital, under an agreement that lasts through 2031. The hospital employed 553 full-time, part-time and contract workers in 2013. It provides hospital care for a 270-mile area of Lincoln County, including Newport, Waldport, Toledo, Depoe Bay and Yachats.

David Bigelow, Samaritan Pacific CEO, received total compensation of $244,608 in 2013: $180,037 in base pay, $15,643 in retirement and deferred compensation, $26,900 in nontaxable benefits, and $22,028 in other forms of compensation.

Finances, year 2014:

Profit: $2.6 million, up 19.5 percent from 2013.

Net patient revenue: $72.3 million, up 8.3 percent.

Reported charity care charges: $2.7 million, down 39.7 percent.

Profit margin: 3.4 percent, compared to 3.1 percent the year before.

Size and scope, as of 2014:

Available beds: 25.

Inpatient days: 4,170.

Emergency department visits: 14,845.

Outpatient visits: 75,070.

- Reach Courtney Sherwood at [email protected], or follow her on Twitter at @csherwood.

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