Willamette Valley Medical Center Responds to Charity Care Article
OPINION – May 6, 2013 – I want to commend you on your mission to educate the public about the major issues facing our healthcare system. As a hospital CEO, I know all too well how much more needs to be accomplished in this area, not just in Oregon but throughout the nation.
I wanted to provide additional information and perspective for your article entitled “For-Profit Hospitals Skimp on Charity Care.” First, let me apologize that your reporter’s call was not returned last week. Our marketing director was out of the office at that time. He has since modified his voice mail message so that we can respond in a timely manner to reporter’s inquiries.
I know you realize how hard it is to truly compare “apples to apples” when hospitals do not even define charity care using the same methodology. However, it is very disconcerting to us – and misleading to the public – when only a partial picture is shared, skewing the actual contributions our hospital has made, and leaving out portions of data that are very significant.
Because Willamette Valley Medical Center accounts for charity care in several different categories – a process that is different from non-profit hospitals – our charity care contributions were not reflected properly in your article published on April 26.
In 2011, we changed our policy in order to be able to offer significant discounts to patients who did not have any insurance. This charitable discount is separately recorded on our financial statements in order for us to track and be able to report this important community benefit. The write-offs for these discounts – which were previously categorized simply as charity care – are not reflected in the 2012 Oregon Community Hospital Report and were not included in your article. While it may appear that our charity care dropped significantly between 2010 and 2011, the opposite is, in fact, true. In 2011, in addition to the charity care which is reflected in the report. WVMC also provided $7,249,579 of discounts to uninsured patients for total charity care of $8,137,007. Further, we also incurred $6,468,743 in uncollectable amounts (bad debt expense). Adding together our 2011 charity care, self-pay discounts and bad debt brings our total uncompensated care to $14,605,750, which is 5.5 percent of our gross revenues.
For an “apples to apples” comparison between for-profit and non-profit hospitals, taxes should be included since non-profit hospitals are provided with a tax exempt status specifically to assist in funding charity care for the poor. Therefore, if you include taxes paid by WVMC, you’d find an additional $993,374 in community benefit contributions. Adding together our total uncompensated care costs to our taxes brings our community contributions to approximately 6 percent of our total gross revenues. If you look at net revenues, truly a more accurate reflection of the hospital’s collections which are used to pay for operating expenses, our total contributions (including charity care and taxes) represent 16.6 percent of revenues.
Your goal of educating the public on the major issues confronting our healthcare system – rising costs, unequal access and the lack of standardization to measure quality – is commendable. We want to assist you in accurately representing the state’s for-profit – or tax paying – hospitals. I am confident that we provide an equitable share of uncompensated care to the community we are honored to serve in addition to our other significant community benefits.
I have attached our 2013 Community Benefit Report, providing a more recent summary of Willamette Valley Medical Center’s community benefit contributions (from 2012). Thank you for allowing us to provide this clarification.
Daniel Ordyna is chief executive officer of Willamette Valley Medical Center
To review the community benefit report prepared by Willamette Valley Medical Center, click here.