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Salem partnership, Knight challenge fuel president's $400,000 bonus, documents show.



Oregon Health & Sciences University paid six top executives a combined $1 million in bonuses this year — just months after successfully raising $1 billion for beefed-up cancer research.

OHSU President Joe Robertson was the big winner. His bonus of $396,447 came on top of a yearly salary of more than $1-million, as well as earnings from OHSU clinical enterprise of more than $150,000.

The hefty compensation numbers highlight the tension between OHSU’s status as a public entity and its increasingly aggressive efforts to compete in an industry dominated by non-public health systems and insurers.

Portland’s largest employer, OHSU’s recent publicity has centered on its success raising $500 million – including $200 million from the state – to invest in cancer research and trigger matching funds from Nike cofounder Phil Knight and his wife, Penny.

But another transformation has been going on as well.

In 1995, state lawmakers converted OHSU from a state agency to a stand-alone public corporation, intended to maintain its public purpose while giving it the flexibility to compete. The combination hospital and medical school continues to operate on state land and collect some general fund from the state budget. It enjoys lucrative government legal caps on lawsuit payouts as well as an exemption from antitrust law.

In recent years Robertson, who holds an M.B.A as well as a M.D., has used his business orientation to drive the university into a more aggressive stance in Oregon’s health care industry – even as the institution continues to collect sizable benefits from being considered a public agency.

It’s a shift for which Robertson has been rewarded, though the university refused to explain the details of his large bonus. Instead, spokeswoman Tamara Hargens-Bradley would say only that Robertson "received additional payments ... after meeting milestones established beyond his annual incentives.

A consultant’s report released under Oregon Public Records Law, however, shows that Robertson’s contract included a $50,000 bonus for completing a deal with Salem Health, and a $100,000 bonus for the university’s Knight Challenge fundraising success.

For Robertson, it’s been a year of deals.

In December 2014. OHSU awarded a $50 million loan to struggling health insurer Moda Health. The university’s board has since taken an option on an ownership stake in Moda. That’s after discounting its valuation of the loan by $16.5 million due to the insurer's struggles.

This spring, Robertson negotiated a partnership with Salem Health, creating a unified Willamette Valley health care powerhouse that’s in a better position to negotiate better reimbursements with health insurers. OHSU is now in similar talks with Tuality Healthcare of Washington County.

On June 25, the university hit its fundraising goals of the Knight Challenge. That was just five days before the close of the fiscal year for which Robertson’s Knight bonus was awarded.

Last year, in contrast, Robertson received a bonus of $240,474 for his previous year’s work. The year before that, $182,224.

The total executive team payments of $1,075,938 amounted to 27 percent of the executives' combined current salaries. Robertson's bonus was more than 38 percent of his $1,027,753 salary. The executive team includes Peter Rapp, an executive vice president who is also executive director of OHSU Healthcare; Lawrence Furnstahl, executive vice president and chief financial officer; Jeanette Mladenovic, executive vice presdent and provost; Mark Richardson, executive president and dean of the OHSU School of Medicine; and Connie Seeley, senior vice president for public affairs and chief of staff.

The bonuses are not limited to top executives.

Other tiers of management also receive incentive pay. Managers’ bonuses are capped at 15 percent of pay, and senior managers at 20 percent. For senior managers and executives, half or less of their bonus is based on individual achievements. The rest of it is based on how OHSU does financially.

And OHSU had a good year, hitting an operating margin – the equivalent of profits – of nearly 5 percent on a budget of more than $2 billion.

In large part, that success was driven by the Affordable Care Act, which boosted net patient revenue by 10 percent, according to university documents.

As for the executives’ individual achievements to trigger a portion of their bonus, OHSU refused to divulge how those were calculated.

OHSU, which lawmakers converted from a state agency to a public corporation in 1995, falls under Oregon Public Records Law — which its leaders promised the Legislature it would follow. However, at the same time it won a special exemption for sensitive business secrets.

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