One of Oregon’s largest healthcare players outside the metro area experienced a $67.3 million net loss in its 2016 fiscal year, as expenses climbed and revenue did not keep pace. PeaceHealth, headquartered in Washington, operates hospitals in the Eugene area, Cottage Grove and Florence, and saw its margins shrink at each location, as it weathered contract negotiations at tis hospitals and turnover among its leadership.
That’s among the details we’re uncovering in this fourth story in The Lund Report’s fifth-annual in-depth look at all of Oregon’s hospitals.
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, which also provided information about capital projects under way.
- 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.
- Hospital performance metrics are tracked by the Oregon Health Authority.
- Executive pay and additional financial details about hospital chains come from IRS 990 forms and from the systems’ own unaudited reports.
- We are looking at bond-rating documents, third-party assessments, and other sources as we dig into these hospitals as well.
Our first three stories in this series dug into Legacy Health, the Adventist and Tuality chains, and Salem Health and Santiam Hospital.
PeaceHealth
Founded by nuns over a century ago, PeaceHealth has grown to become a major force in Pacific Northwest heathcare, with a three-state network of clinics, labs and hospitals. The chain now operates four hospitals in Oregon, and six others in Washington and Alaska.
Since 2011, when it left its previous headquarters in Bellevue, Wash., the chain has been headquartered in Vancouver, Wash.
Because of its Catholic affiliation, some have raised concerns that patients in PeaceHealth-served communities may not have access to certain forms of reproductive and end-of-life care. A number of contract negotiations between nurses and other union workers and hospital leaders have kept PeaceHealth executives busy over the past year, and the nonprofit has also seen significant turnover among its top employees.
According to its audited financial reports, PeaceHealth ended the July 1, 2015, to June 30, 2016, fiscal year with a net loss of $67.3 million -- compared to a profit of $153.9 million a year earlier. Patient revenues dropped about $9.3 million, to $2.39 billion, across the entire chain. Expenses climbed $136.4 million, to $2.4 billion – including a $92.9 million climb in salary and wage costs. In addition, interest rate swaps cost PeaceHealth $60.9 million, and the chain took a $4.2 million loss from operations of Columbia United Providers, a Medicaid program it sold to Molina Healthcare.
Former PeaceHealth President Alan Yordy, who is now listed as “president emeritus” on its tax filings, received executive compensation of $2.7 million in fiscal year 2016: $616,004 in base pay, $1.3 million in bonuses and incentives, $283,721 in retirement or deferred compensation, $19,526 in nontaxable benefits and $481,070 in other forms of compensation.
Former Chief Operating Officer Beth O’Brien, who left PeaceHealth in November, after the close of the 2016 fiscal year, received executive compensation of $1.3 million: $967,712 in base pay, $318,202 in bonuses and incentives, $15,348 in nontaxable benefits, $42,500 in other compensation -- and no reported retirement pay.
President and CEO Elizabeth Dunne, who role at the helm of PeaceHealth started several months into the fiscal year, received $361,412 in executive compensation: $176,925 in base pay, $50,000 in bonuses and incentive pay, $17,700 in retirement and deferred compensation, $1,245 in nontaxable benefits, and $115,542 in other forms of compensation.
PeaceHealth Sacred Heart Riverbend
Opened in 2008, Sacred Heart Medical Center at Riverbend is less than 10 miles from its Eugene-based sister hospital, PeaceHealth Sacred Medical Center University District. The newer location, in Springfield, has come to house many general hospital services that were previously in Eugene.
More recently, the Riverbend hospital has been developing community programs that go beyond its physical campus. In 2015, it moved its urgent care clinic to Springfield’s Gateway Marketplace, in an effort to improve access and lessen the confusion of patients, some of whom mixed up urgent care with the emergency department. Ealier this year, it opened a four-building, 52-room Alzheimer's care center.
Finances, year 2016:
- Total margin: $77,192,608, down 27.1%
- Net patient revenue: $626,316,723, up 2%
- Charity care: $10,020,728, up 37.4%
Size and scope, 2016:
- Available beds: 347, unchanged from 2015.
- Inpatient days: 112,068, up 4.6%
- Emergency room visits: 48,798, down 2.6%
- Outpatient visits: 102,761, down 3.5%
Revenue sources:
- Medicaid: 11.9%
- Medicare: 37.3%
- Commercial insurance: 45.4%
- Self-pay: 4.8%
- Other: 0.5%
PeaceHealth Sacred Heart University
Thought it was once PeaceHealth’s major Eugene-Springfield-area hospital, in the eight years since its Springfield-based sister medical center has opened, Sacred Heart-University District is now considered a specialty hospital, though it maintains its acute-care designation.
While the newer hospital has become more profitable and sees more patients, University District has for several years running continued to host more outpatient visits than its nearby sibling.
Finances, year 2016:
- Total margin: negative $4,531,831, compared to negative $1,027,536 a year earlier.
- Net patient revenue: $106,572,269, down 1.3%
- Charity care: $2,166,002, up 99.8%
Size and scope, 2016:
- Available beds: 89, compared to 93 beds in 2015.
- Inpatient days: 22,556, up 4.%
- Emergency room visits: 30,292, up 4.%
- Outpatient visits: 111,271, up 1.9%
Revenue sources:
- Medicaid: 18.9%
- Medicare: 43.2%
- Commercial insurance: 31.9%
- Self-pay: 6.5%
PeaceHealth Cottage Grove
With just 14 beds, PeaceHealth Cottage Grove Community Medical Center is the one of the smallest hospitals in Oregon -- only six-bed West Valley Hospital is smaller. Located about 23 miles south of Eugene and Springfield, it offers general services and emergency care, but has no surgery or routine childbirth services.
The original Cottage Grove Hospital declared bankruptcy in 1998, when PeaceHealth stepped in – keeping minimal services in place at first, and then later expanding the hospital.
Finances, year 2016:
- Total margin: negative $1,803,975, compared to negative $897,608 a year earlier.
- Net patient revenue: $29,655,113, up 3.6%
- Charity care: $376,308, down 8.6%
Size and scope, 2016:
- Available beds: 14, unchanged from 2015.
- Inpatient days: 1,216, up 8.3%
- Emergency room visits: 11,676, up 1.4%
- Outpatient visits: 37,048, up 4.%
Revenue sources:
- Medicaid: 24.3%
- Medicare: 47.4%
- Commercial insurance: 19.3%
- Self-pay: 3.3%
- Other: 5.7%
PeaceHealth Peace Harbor
Designated a critical access hospital in recognition of its small size and limited resources, Florence-based PeaceHealth Peace Harbor is in the coastal community of Florence, about 70 miles of Springfield and Eugene. Its remote location and small size have made recruiting physicians and nurses a challenge for Peace Harbor.
After protracted negotiations, Oregon Nursing Association members agreed to a new contract with Peace Harbor leaders this August. Among its provisions were wage increases aimed at improving recruiting and retention efforts.
Finances, year 2016:
- Total margin: $75,198, down 97.9%
- Net patient revenue: $69,900,943, down .9%
- Charity care: $869,067, down 11.8%
Size and scope, 2016:
- Available beds: 21, unchanged from 2015.
- Inpatient days: 3,100, down 1.4%
- Emergency room visits: 9,330, up 9.8%
- Outpatient visits: 102,227, up 1.4%
Revenue sources:
- Medicaid: 18.1%
- Medicare: 56.9%
- Commercial insurance: 18.3%
- Self-pay: 2.1%
- Other: 4.6%
Reach Courtney Sherwood at [email protected]
