Fewer stand-alone hospitals remain in Oregon each year. Just six are left that operate independently, rather than as part of chains or public districts, as a national push to consolidate has led once-solo institutions to join larger chains.
Since last year, Tuality Health and Salem Hospital have both cemented new relationships with OHSU, and Silverton Health has joined the Legacy system. The hospitals that remain independent are primarily rural, and are investing tens of millions of dollars in new buildings, equipment and relationships, even as they continue to go it alone.
For the fourth year, The Lund Report is digging into the money and operations of Oregon’s hospitals. In our first eight stories, we examined Providence Health and Services; Kaiser Permanente and Asante; PeaceHealth; three faith-based chains with small Oregon footprints; OHSU and its new affiliates Salem Health and Tuality; Samaritan Health Services; Legacy Health; and St. Charles Health System.
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.
- For growing hospitals, financial details often come from reports to bond regulators, or from assessments by ratings agencies.
- Additional financial details about hospital chains come from IRS 990 forms and from the systems’ own unaudited reports.
This week, we are looking at small, independent hospitals across the state. The final story in this series will examine hospitals that are operated by public districts. These stories draw largely from 2014 financial reports that offered the latest financial data available as The Lund Report conducted our analysis of every hospital in the state, a process that began in March. New 2015 figures released at the end of July will be incorporated into a sweeping overview that will look at broad hospital trends, once this series concludes.
Columbia Memorial Hospital
Astoria’s Columbia Memorial Hospital has roots that can be traced to both Catholic and Lutheran origins dating to the 1880s, and today it maintains Lutheran affiliation.
In March, the hospital announced it would close its home-based health program, saying that reimbursements had dropped, while the costs of running the program climbed. That left Providence Home Health Services in Seaside as the only home health provider remaining in Clatsop County. Columbia Memorial Hospital officials said they worked with Providence to transition patients over to Providence.
Last year, Columbia Memorial announced plans to collaborate with the OHSU Knight Cancer Program on a new cancer care facility in Clatsop County. The $16.5 million, 19,000-square-foot, two-story building s being built as a result of this relationship breaks ground later this month, with a targeting opening date of fall 2017. The 75 to 100 Clatsop County residents who travel to Portland, Longview or Seattle for radiation therapy will be able to receive that care locally.
After the cancer care project, Columbia Memorial plans to renovate and expand its emergency room, a project still in the design phase, which is expected to cost $3 million to $5 million.
Analysts at Fitch Ratings said earlier this month that they view Columbia Memorial Hospital’s partnership with OHSU favorably, though they left the hospital’s rating at BBB-, which put the hospital's bonds at investment grade, though just one step above speculative, suggesting that loans to the hospital are a moderate credit risk.
Fitch cited significant revenue growth, strong operating cash flow and a clinical affiliation with OHSU as positives in Columbia Memorials’ favor. Less favorably, Fitch noted that bonds issued this year increased the hospital’s total debt by 70 percent, and with only about 30 percent market share, the hospital is less dominant within its community than most rural hospital systems.
Finances, year 2014:
- Net income: $4,780,225, down 1.97% from 2013.
- Net patient revenue: $75,819,625, up 7.64%.
- Charity care: $1,139,916, down 63.73%.
- Profit margin: 6.01%, down from 6.66% a year earlier.
Size and scope, 2014:
- Available beds: 25, the same as last year.
- Inpatient days: 4,900, up 17.87%.
- Emergency department visits: 13,189, up .3%.
- Outpatient visits: 162,634, up 13.62%.
Good Shepherd Medical Center
Hermiston-based Good Shepherd Medical Center opened in 1954, funded through a mix of community contributions and federal dollars. Good Shepherd was first sponsored by Portland's Lutheran Welfare Association. Within a few years, however, the Lutheran Welfare Association had handed control of Good Shepherd over to a locally governed community nonprofit.
Good Shepherd Medical Center is now part of a larger Good Shepherd Health Care System, a network of clinics, a pharmacy, and hospice as well as the hospital. With over 500 employees, it’s become a major employer within its region.
The hospital’s current campus was built in the 1980s. Last year, Good Shepherd opened a $15.3 million state-of-the-art surgery center, with some surgery suites twice the size, and added room for growth. The expansion also improved the hospital’s ability to sterilize surgical instruments, added a utility plant to the campus, and attracted $2.3 million in equipment.
Finances, year 2014:
- Net income: $13,755,413, up 12.64% from 2013.
- Net patient revenue: $82,617,147, up 2.71%.
- Charity care: $7,411,436, down 23.8%.
- Profit margin: 15.41%, up from 14.% a year earlier.
Size and scope, 2014:
- Available beds: 25, the same as last year.
- Inpatient days: 4,838, down 3.1%.
- Emergency department visits: 18,232, down .52%.
- Outpatient visits: 49,367, up 7.17%.
Grande Ronde Hospital
Grand Ronde Hospital has been serving La Grande and surrounding communities in rural northeast Oregon since 1907. It’s the only hospital in Union County, and serves a population base of more than 25,000 people. Its surrounding mountain passes are frequently closed in the winter, and the next nearest hospitals are nearly 50 miles away.
In 2014, the hospital started a $6.8 million expansion of its La Grande-owned medical office complex, where specialty services such as OB/GYN and pediatrics are now based. This office complex includes dedicated exam rooms and offices for medical providers who previously had to share space.
Grande Ronde has turned to telemedicine partnerships to expand its breadth of care; physicians in Idaho support heart-attack survivors, endocrinologists consult from Walla Walla, Washington, and the
Saint Alphonsus Health System offers consultations on neonatology and maternal fetal medicine, while other specialists also provide services.
Finances, year 2014:
- Net income: $5,967,180, up 62.96% from 2013.
- Net patient revenue: $68,226,564, up 3.68%.
- Charity care: $3,437,431, down 2.63%.
- Profit margin: 8.29%, up from 5.32% a year earlier.
Size and scope, 2014:
- Available beds: 25, the same as last year.
- Inpatient days: 4,177, down 9.02%.
- Emergency department visits: 11,645, up 3.57%.
- Outpatient visits: 114,366, up 5.19%.
Mid-Columbia Medical Center
Based in The Dalles, Mid-Columbia serves about 50,000 people in Oregon and Washington. The hospital was the first in the world to fully implement what’s known as the Planetree philosophy of care, a patient-centered, holistic approach to healthcare.
Mid-Columbia recently announced a new wing that hospital officials call the most significant construction project in the hospital's hundred-plus years of operation. Completion is expected in late 2019 or early 2020.
Officials estimate they will spend $55 million on the project, with 85 percent of funds coming from private debt, most likely long-term tax exempt bonds, and the rest from hospital reserves, private grants and donations.
The new tower will house 24 private acute-care beds, a new surgery department, a pre-operative clinic. In addition to those facilities, the existing hospital will remain, and will house an upgraded emergency department, as well as other clinical services and hospital administration.
The hospital aims to secure financing by mid-2017, for a construction effort that will last about two years.
Finances, year 2014:
- Net income: $2,829,890, up 397.46% from 2013.
- Net patient revenue: $106,966,794, up 11.44%.
- Charity care: $5,994,875, down 11.46%.
- Profit margin: 2.52%, up from negative .92% a year earlier.
Size and scope, 2014:
- Available beds: 49, the same as last year.
- Inpatient days: 7,137, down 4.01%.
- Emergency department visits: 15,908, up 7.12%.
- Outpatient visits: 210,828, up 7.91%.
Santiam Memorial Hospital
Santiam opened its doors in 1953 after raising funds from more than 3,000 community members and businesses. In 2012, its west tower debuted, doubling the hospital’s size and housed the surgery center, family birth center and intensive-care unit. In 2013, the hospital changed its name, from Santiam Memorial Hospital to Santiam Hospital.
The hospital exists in a particularly competitive marketplace, a short drive from both Salem Hospital and Silverton Hospital. The three institutions collaborate on community health efforts, even as they compete for market share within the region.
Finances, year 2014:
- Net loss: $2,521,335, compared to a net loss of $3,139,796 last year.
- Net patient revenue: $37,431,343, up 7.84%.
- Charity care: $783,971, down 48.64%.
- Profit margin: negative 6.59%, up from negative 8.8% a year earlier.
Size and scope, 2014:
- Available beds: 40, the same as last year.
- Inpatient days: 3,404, down 6.04%.
- Emergency department visits: 11,531, up 9.72%.
- Outpatient visits: 38,374, up 5.84%.
Sky Lakes Medical Center
Sky Lakes Medical Center in Klamath Falls is the only full-service hospital in a 10,000-square-mile area of southern Oregon and northern California. Previously known as the Merle West Medical Center, it took the “Sky Lakes” name in 2007, when it opened a 100,000-square-foot inpatient care area.
In June, the Fitch Ratings agency assigned an A- rating to a $52.1 million revenue and refunding bond series the hospital issued, revising Sky Lakes Medical Centers' outlook to positive from stable. Proceeds from the bond issue will fund $25 million of capital expenditures and refinance older debt.
Fitch applauded Sky Lakes for a number of years of solid profitability, driven by outpatient volume growth, a more stable payer mix following the Affordable Care Act, a continuing focus on expenses, and successful efforts to raise some rates for medical procedures.
Though it’s independent, Sky Lakes has a close relationship with Oregon Health & Science University, which is working to establish one of two new rural campuses in Klamath Falls. (The other rural campus will be in Coos Bay.)
A planned $36 million investment in a medical office building, parking and equipment purchases will include facilities to house OHSU rural health programs in Klamath Falls.
Finances, year 2014:
- Net income: $19,600,985, up 39.87% from 2013.
- Net patient revenue: $188,278,660, up 10.53%.
- Charity care: $11,662,310, down 26.02%.
- Profit margin: 9.66%, up from 7.76% a year earlier.
Size and scope, 2014:
- Available beds: 100, the same as last year.
- Inpatient days: 19,443, down 6.26%.
- Emergency department visits: 21,848, up 13.08%.
- Outpatient visits: 365,520, up 4.51%.
Courtney Sherwood can be reached at [email protected]. Follow her on Twitter at @csherwood.
