Oregon Assn. of Hospitals and Health Systems (OAHHS)
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Oregon Community Hospitals Support 1 in 20 Jobs Throughout State - 03/29/17

Lake Oswego -- March 29, 2017 -- Oregon community hospitals both directly provided and helped support over 117,000 jobs to Oregon communities in 2015 -- or 1 in 20 jobs, according to the most recent data available in a new study conducted by ECONorthwest and released today by the Oregon Association of Hospitals and Health Systems (OAHHS).

Over 62,000 Oregonians are directly employed by Oregon's community hospitals and over 55,000 jobs are associated with hospitals, showing that community hospitals continue to be critical economic drivers. These over 117,000 hospital and hospital-related jobs account for 4.9 percent of the state's total employment. From 2013 to 2015, direct hospital employment increased in the state by 2,569 jobs or by 4.3 percent.

"Today's report shows the continued importance of Oregon's community hospitals to the well-being both of Oregonians and Oregon's economy," said Andy Van Pelt, executive vice president of OAHHS. "From Portland to Heppner, hospitals are an important cornerstone within Oregon communities for economic, social, and health reasons. However, proposed health care legislation at the state level creates an uncertain future for both community hospitals and the patients they serve."

"Job growth in the healthcare sector has been robust during the past few years," said John Tapogna, President of ECONorthwest. "Urban and rural communities across the state benefit from healthcare jobs and operations, which support our aging population and provide middle and higher-income jobs."

Other key findings from the report include:

Direct Output.
Oregon hospitals directly accounted for $9.6 billion in economic output in Oregon in 2015, up from $8.4 billion in 2013.

State and Local Taxes.
Hospitals directly generated approximately $258 million in tax and fee revenue for state and local jurisdictions in 2015. State and local governments collected another $295 million in taxes from businesses that supply goods and services to hospitals. This sums to a total tax revenue of about $553 million.

"Oregon communities depend on hospitals for not only essential health care but also for the economic stability that these jobs provide," added Van Pelt. "Community hospitals are a vital source of sustainable, family-wage jobs and ensures that patients across Oregon have access to quality inpatient and outpatient care 24 hours a day, 365 days a year."

In 2015, Oregon hospitals also provided more than $1.9 billion in community benefit contributions, an increase over 2013's contributions. In Oregon, "community benefit" is defined in statute as health care-related services that nonprofit hospitals provide without the expectation of compensation.

"This data shows that hospitals are not only meeting pledges to maintain their overall community benefit levels--they are exceeding them," said Van Pelt. "This is happening despite a significant drop in charity care due to the Affordable Care Act. Oregon continues to be one of the only states to proactively provide core community benefit to local communities."

The economic impact study --commissioned by OAHHS-- was conducted by ECONorthwest using state-specific data from the American Hospital Association and using the IMPLAN economic modeling tool.

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About OAHHS: Founded in 1934, OAHHS is a statewide, nonprofit trade association that works closely with local and national government leaders, business and citizen coalitions, and other professional health care organizations to enhance and promote community health and to continue improving Oregon's innovative health care delivery system.

About ECONorthwest: Established in 1974, ECONorthwest is a consulting firm specializing in rigorous economic, planning and financial analysis with over three decades of experience. At the core of everything we do is applied microeconomics. This perspective allows us to fully understand--and effectively communicate--the benefits, costs, and tradeoffs associated with any decision.

In the Midst of Great Uncertainty, Hospital Margins Taper Off - 03/01/17

March 1, 2017 -- After significant market changes following the implementation of the Affordable Care Act, Oregon's community hospitals saw a year-over-year decrease in operating margins and inpatient discharges, while charity care spending rose slightly and emergency room visits increased according to the newly-released quarterly report by Apprise Health Insights on acute care hospitals' financial and utilization trends. With uncertainty around the future of the ACA any downward trend has the potential for amplification.

Hospitals' aggregate operating margin fell to 3.6 percent in the third quarter of 2016 lower by nearly two percentage points from the same quarter in 2015 when it was 5.2 percent; and inpatient discharges fell by 1.6 percent to 79,982 in Q3 2016 compared to the same quarter in 2015, when it was 80,258. Meanwhile, in dollars, charity care expenses in the third quarter of 2016 rose to $89.1 million, up 39 percent from the same time in 2015. Emergency department visits also increased 0.6 percent, with 337,608 total visits in the third quarter of 2016 as compared with the same quarter in 2015.

"This report illustrates the unique challenges hospitals face as we traverse a new era of health care transformation, post-ACA," said Andy Van Pelt, executive vice president of the Oregon Association of Hospitals and Health Systems. "At the same time, the last election brought uncertainty for the future of health care delivery. Serious questions are before us simultaneously at both the state and federal levels regarding the ability of our state's healthcare system to continue Oregon's health care transformation efforts. The financial trends we are seeing now could be significantly different from what we see in the future."

Importantly, Apprise Health Insights' analysis shows that while margins may look healthy in the aggregate, more than half of Oregon hospitals fall below the bond rating agencies' general standards for access to AA-rated bonds, which is a five percent operating margin.

Meanwhile, the year-over-year increase in charity care from stands in contrast to the prevailing policy narrative that charity care has been all but eliminated in Oregon due to the Affordable Care Act. While it has fallen substantially from its pre-ACA levels, it has stabilized at the new lower level with the similar quarterly fluctuations as other financial line items. The demand for charity care has not entirely gone away, and with threats to the ACA at the federal level, it could change dramatically in coming years.

It is important to note that after a drop in uncompensated care spending in 2014, in 2015 hospitals announced a community benefit pledge to maintain, or increase, the amount they spend on community benefit, despite a drop in uncompensated care.

According the Oregon Health Authority's data, in 2015 Oregon's community hospitals fulfilled that pledge by providing $1.9 billion in community benefit activities. In the same year, hospitals experienced 348,138 inpatient stays, 1.4 million emergency room visits, and 11 million outpatient visits, and welcomed more than 44,000 new babies into the world.
"We are proud of Oregon's hospitals for maintaining their deep commitment to community benefit, even as the health care landscape shifted. As we look toward the future and the possibility of further shifts, we believe our hospitals will continue to maintain their core commitment to their communities through these services," added Van Pelt.

The entire report is available at OregonHospitalGuide.org or http://oregonhospitalguide.org/assets/Q3%202016%20Utilization%20Report.pdf

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About OAHHS: Founded in 1934, OAHHS is a statewide, nonprofit trade association that works closely with local and national government leaders, business and citizen coalitions, and other professional health care organizations to enhance and promote community health and to continue improving Oregon's innovative health care delivery system.

Apprise Health Insights is the premier resource for hospital and health system data and analytics in the Pacific Northwest. As the data subsidiary of the Oregon Association of Hospitals and Health Systems, Apprise is uniquely positioned to collect hospital and health system data, and provide the meaningful analysis essential for informed decision-making.

Attached Media Files: Q3 2016 Report , Hospitals Margins Fall