OHSU hands out bonuses before Obamacare's fade
Even as Donald Trump's ascension was rescrambling its financial prospects, Oregon Health & Science University paid six top executives $730,000 in bonuses late last year, records show.
That's significant because they could reflect the last flush times of OHSU under the Affordable Care Act (Obamacare), the health care law that appears slated for repeal thanks to the new balance of power in Washington, D.C.
President Joe Robertson last month announced that in light of Republicans' plans for the law, OHSU would cut back on hiring and reduce its workforce by attrition.
More recently, asked about the bonuses, Robertson issued the following statement: "OHSU is committed to the principle of performance-based compensation, with some portion of total pay at risk based on incentives tied to specific goals. We believe that's the best way to sustain a high-performance organization and be a good steward of our resources."
The executives' compensation is interesting in part because OHSU, Portland's largest employer, is a public institution. Previously a part of state government, OHSU leaders persuaded Oregon in 1995 to make them a quasi-governmental entity called a "public corporation." The combination hospital system/medical school/academic research center still enjoys many of the advantages of being a state agency — such as state-owned property and legal exemptions such as a lucrative tort cap that limits malpractice awards. And a significant portion of its employees are in Oregon's Public Employee Retirement System, PERS.
OHSU receives limited state general funds and at times receives other support as well, as when the Legislature contributed $200 million in bond funding to support its cancer research funding drive called the Knight Challenge.
While the 2010 Patient Protection and Affordable Care Act hasn't made coverage any more affordable for most people, it did dramatically improve the bottom line of health care institutions like OHSU.
The law did so by extending health coverage to more than 500,000 previously uninsured Oregonians. Thanks in part to the increase in insured patients, the university took in $2.6 billion in operating revenues last year. But now, with Medicaid as well as private insurance subsidies all on the chopping block, those flush times could be coming to an end. The university plans a near-freeze on hiring and to cut back on contracts.
While the university hopes to work with Congress and the state to protect expanded coverage, "I cannot imagine a future where times aren't more lean than they are today," Robertson told the Portland Business Journal in January.
In late 2015, Robertson received about $400,000 in bonuses in all. In late 2016, in comparison, he received about $300,000.
Robertson made nearly $1.7 million in all last year, according to a compensation survey released under Oregon's public records law. That sum includes benefits worth $239,000 as well as at least $90,000 in revenue he earned as a medical doctor at the university while also serving as president.
Robertson's compensation is "out of whack" says Les Ruark, an eastern Oregon farmer and former legislative aide, who tries to watchdog state policy discussions. He called it "seriously dismaying that board members of Oregon's premier medical university, their decent and genuine perspectives notwithstanding, have chosen not to challenge the real issue driving presidential salaries — a ... 'do what we must to keep 'em on our turf" selection and retention process."
Last fall, OHSU awarded its six top executives $471,362.58 in raises.
The university says bonuses based on last year's performance were not only justified, but are irrelevant to plans for cutbacks.
"Cost containment measures were implemented in January 2017, long after FY16 had ended, financial audits were finalized and incentives paid," OHSU spokeswoman Tamara Hargens-Bradley said in an email.
Citing a salary survey conducted for the university, she added, "OHSU's executive compensation philosophy is to provide incentives at levels that allow the institution to attract and retain top talent to lead the organization. OHSU compares itself with other academic medical centers and the broader health care industry for most positions and includes the research and education industries for specific positions. As noted in the survey's executive summary, OHSU's annual executive incentives are 'well-aligned with market levels.'"
Robertson has said the university needs to defend its position in the competitive Oregon health care arena. As a consequence, the university has undergone significant changes over the past two years, entering into what amounts to a merger with Salem Health and Tuality Healthcare. It even flirted with buying a stake in Moda Health, the troubled private insurer.
OHSU executive compensation
Joe Robertson, President
Current salary: $1,110,240.04
Previous salary: $1,027,752.96
total 2016 bonus: $294,153.84
Lawrence Furnstahl, Executive Vice President and Chief Financial Officer
Current salary: $723,252.14
Previous salary: $688,811.50
total 2016 bonus: $166,967.91
Connie Seeley, Chief Adminstrative Officer, Senior Vice President for Public Affairs and Chief of Staff
Current salary: $350,000.04
Previous salary: $283,250.24
total 2016 bonus: $67,526.86
Elena Andresen, Interim Senior Vice President and Provost
Current salary: $325,000.00
Previous salary: $250,000.14
total 2016 bonus: $46,499.80
John Hunter, Interim Senior Vice President, Dean of School of Medicine; President, Faculty Practice Plan
Current salary: $713,799.88
Previous salary: $540, 995.04
total 2016 bonus: $20,000
Cynthia Grueber, Senior Vice President, Chief Operating Officer, OHSU Healthcare
Current salary: $630,002.10
Previous salary: $590,121.74
total 2016 bonus: $138,603.1