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 June Hospitals report healthy bottom lines While Oregon patients might have been hurting, most of their hospitals made a speedy recovery from their dismal finishes in 1999. In 2000, 33 hospitals performed extremely well, showing strong net income gains. All together, only 41 hospitals had provided their year 2000 financial reports to the Office of the Oregon Plan Policy and Research by mid-June. Combined, these 41 hospitals banked $133,193,508 in net income in 2000. They spent $2.59 billion on operational expenditures and made $2.66 billion in operating revenue. Together they netted another $61 million in non-operating revenue (from taxes, investments and gift shops). Legacy Emanuel Hospital and Medical Center was the single biggest bread winner. It took in nearly $16 million in operating income and just under $8 million in non-operating income giving it close to $24 million in net income during 2000. Overall, Legacy Health System bounced back from a weak year in 1999 when its net income surged 13.5 percent, reaching $44 million. As hospital's wallets got fatter, so did their employees' paychecks. Salary information, including benefits and expense accounts, comes from the IRS Form 990, which non-profit hospitals are required to file with the U.S. Justice Department. In 2000, the top salary went to Legacy's retired President and CEO John King, now an advisor, who pulled down $1.7 million, up a staggering 48 percent from 1999, the year he retired as CEO. Legacy's next three highest paid executives -- President and CEO Robert J. Pallari, Senior Vice President Jane Udall and Senior Vice President Barbara Zappas -- together earned more than $1.5 million. Pallari's salary increased 16 percent, reaching $744,154. Zappas saw a 20 percent hike from the previous year, taking home $410,690, and Udall earned $388,908. P. Campbell Groner III, senior vice president and chief financial officer, received $249,738 in 2000, up from $196,470 in 1999. Pamela S. Vukovich, treasurer earned $249,738. Her salary stood at $167,302 in 1999. Legacy spent $490 million running its four hospitals and pulled down a combined $516 million in operating revenue. Its net income increased 13.5 percent from 1999, thanks in part to Legacy Mount Hood Medical Center pulling out of the red. Regence launches Access Blue The trend away from managed care has captured the attention of Oregon's largest health plan, Regence BlueCross BlueShield. However, unlike Providence, which is abandoning its HMO next July, the Blues are moving in slow motion. They're preparing to launch a similar product this fall and pay physicians the same as Providence, a $55 conversion factor with clinical laboratory fees reimbursed at 115 percent of Medicare rates. The gatekeeper concept is gone; consumers will be charged co-insurance for seeing specialists and using hospital services, and Regence is not contracting with IPAs. But the similarities with Providence end there. Regence Access Blue will only be available in the metropolitan areas of Portland and Vancouver. HMO Oregon will remain a viable entity in all regions of the state, and physicians are being hand picked. "Regence isn't willing to put the nails in the (HMO) coffin yet," said Dr. Bart McMullan, senior vice president of health services and chief medical officer. "We're seeing an evolution in what people mean by managed care. They don't like gatekeepers. The previous idea of the primary care physician barring the door on that concept is dead." Oregon Health Plan debated As the expansion of the Oregon Health Plan comes down to the wire, diverse sections of the health care industry are seeking to influence the legislature before HB 2519 reaches the governor's desk. Health plan contractors want an actuarially sound reimbursement system that recognizes their contribution, said Jeff Heatherington, CEO of FamilyCare. Commercial insurers, once the backbone of the health plan, "want to participate again on terms that are favorable to them," said Hersh Crawford, Medicaid director. "They don't want decisions made that shut them out of the expansion." Mark Gibson, the governor's health policy advisor, has assurances from Tommy Thompson, Secretary of Health and Human Services, that when Oregon's waiver hits Washington, DC this fall, subsidies for commercial insurance won't pose a problem. "He expressed optimism and is a strong advocate," Gibson told the Oregon Health Council. Insurers win again Time is running out on a bill that would have created a "safe haven," and prevented life insurers from using genetic information before writing policies up to $100,000. House Bill 2267 was referred to the Ways and Means Committee where it's expected to die. "As far as I know, not one single state has created a safe harbor for genetic testing as it relates to insurance policies," said Rep. Jeff Merkley (D-Portland), the bill's chief sponsor. "This issue has been struggled with internationally and many countries have laws, but in the U.S., insurance companies have no limits on what information they can use, or what they can ask about." Out of 30,000 genes, only about 12 have a high correlation to a catastrophic disease, which are the only ones that could have a substantial impact on insurers, he said. Nurse staffing passes Facing inevitable defeat, a beaten Oregon Association of Hospitals and Health Systems (OAHHS) grudgingly sat down at the table with the Oregon Nurses Association (ONA) to hammer out compromises on a bill requiring them to develop nurse staffing plans and quell their use of mandatory overtime (HB 2800). In the end, the association didn't oppose the bill and Senate President Gene Derfler (R-Salem), who initially said the Senate would kill the bill, was proven wrong. Thanks to its early upper hand, the ONA was able to attach the main components of HB 2700, which offers nurses whistle blower protection, and safeguards a nurse from retaliatory action. "There isn't any reason now a nurse shouldn't feel comfortable advocating for her patients as long as she's following a process and documenting her concerns," said Martin Taylor, the ONA's health policy coordinator. However, the hospital association insists the provision duplicates laws already in place. "What we oppose is the anti-hospital rhetoric -- all sorts of protections for nurses against hospitals when nurses uncover the unsavory, illegal, inappropriate activities going on in hospitals," said its president, Ken Rutledge. Physician speaks out against disease management Despite assurances their patients will reap benefits, not all physicians are embracing the disease management approach fostered by health insurers. At least one outspoken physician is very critical of what he considers the intrusion of the insurance industry into the practice of medicine. Dr. James Puterbaugh, who practices internal medicine at Providence St. Vincent Medical Center, refuses to participate because he's very concerned about the potential for error and the loss of trust between patients and himself. Disease management is supposed to advance medical practice; however, it has the potential to create errors, lead to personality problems and difficulties in misinformation, he said. "For example, say a fax is sent to my office suggesting I contact a patient who has stopped taking his water pills and other medications" Puterbaugh said. "What happens if this fax ends up going to the wrong office? Or, say, a patient complains to the telephone caller about being short of breath and having back pain, but that information is never conveyed to me?" Dramatic changes ahead for Multnomah County's mental health Every month a check for $2.3 million arrives in Multnomah County to provide mental health services to 68,000 Oregon Health Plan members. That's just the tip of the iceberg. When all state and county dollars appropriated for mental health are combined, the total reaches $110 million a year, according to Jim Gaynor, who's been hired as a change agent to "clean up" the system and now reports directly to Commission Chair Diane Linn. To put it mildly, Gaynor represents a threat to the status quo -- the unionized employees, the supervisory staff and everyone who currently holds a contract. All together, close to 200 county employees are responsible for mental health, from handling involuntary commitments to working with school-based clinics. Whether they'll all keep their jobs hasn't been determined. "I'm not targeting union jobs, but someone has to make the call about who comes first -- consumers or the number of positions we have," Gaynor said. And without more money filtering into the outpatient system, his plan won't work because there are at least 50 people a day who need, but aren't receiving mental health services. OHSU loses child psychiatrist A budget deficit is being blamed for Oregon Health Sciences University's decision to lay-off one of its four child and adolescent psychiatrists, Dr. Kathleen Myers. However, the true story reverberates back to the turmoil at Legacy Emanuel Medical Center last year when Dr. Keith Cheng, a prominent member of the team, "was essentially pushed out," according to one Legacy employee who spoke to the Portland Business Journal. "It was getting nasty up there." Cheng's hasty departure led to a walk-out by Legacy's four remaining child psychiatrists, including Dr. Myers, and a decision by OHSU to suspend its child psychiatry residency program in favor of Providence Health System. In an effort to restore good will and combat its deficit, OHSU engaged in talks with Legacy officials this spring, said Dr. George Keepers, who chairs its psychiatry department. Legacy was willing to take Dr. Myers back. She could have remained on the faculty, continued her rural outreach program and supervised residents. However, Legacy refused to work with Dr. Cheng again. "There were serious interpersonal and substantive issues with Legacy Emanuel's administration," said Dr. Keepers, who was unwilling to elaborate. "I guarantee you, the division chair and I tried very hard to reach an agreement with Emanuel." Had agreement been reached, OHSU would have worked out a financial arrangement to pay salary faculties and provide stipends for its fellows who would have resumed their training at Legacy Emanuel. With the additional revenue, OHSU might even have been able to hire more child psychiatrists. Also in this issue...
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