2011

IN THIS REPORT What is PeaceHealth? . . . . 2 Community By the Numbers ...... 3 Financial Reports . . . . . 4 Benefit Report Monthly Milestones . . . . 6 Welcome PeaceHealth publishes this annual report to health care dollar goes . Your health care is the community because the community is important to you, and to us . literally part of our mission: We carry on the healing mission of Jesus Christ by promot- Health care is becoming more and more ing personal and community health, relieving challenging . Pressure to reduce costs col- pain and suffering, and treating each person lides with increased capability and demand in a loving and caring way . for services . On top of this, fewer and fewer people have traditional commercial (typically At PeaceHealth, we understand and take very employer-sponsored) insurance that pays seriously our responsibility to serve the com- the full cost of care . As we enter an era of munity through our hospitals, medical groups health care reform, these pressures will only and related health services . We are the re- increase . PeaceHealth is working hard to ex- gion’s largest employer, the largest provider tract costs from its processes and systems to of health services, and by far the primary be prepared for what the future brings . source of care for the poor and uninsured . For all these reasons, we are pleased to share If you have any comments or questions, with you this annual accounting of how we’re please share them with us at doing, who we’re serving, and where your publicaffairsphor@peachealth org. . 2011 COMMUNITY BENEFIT REPORT

What Is PeaceHealth?

eaceHealth traces its origins to Bellingham, Wash., PeaceHealth Oregon Region encompasses hospitals Pin 1890, when the Sisters of St. Joseph of Peace and clinics located in the Eugene-Springfield arrived to establish a hospital to serve the loggers metropolitan area, including Cottage Grove: and fishermen of the Pacific Northwest. Hospitals in  Sacred Heart Medical Center Ketchikan, Eugene and Longview were added, and at RiverBend in 1976 the Sisters formed a nonprofit company, then  Sacred Heart Medical Center known as Health and Hospital Services, to bring at University District them together under one organization. The name was  Cottage Grove Community changed to PeaceHealth in 1994. Hospital and Clinics • Cottage Grove Community Hospital For fiscal year 2010-2011, PeaceHealth has one • South Lane Medical Group hospital in Alaska, four in Washington and four • Cottage Grove in Oregon, all in Lane County. Other PeaceHealth • Creswell services include clinics and PeaceHealth Laboratories, • Dexter also based in Lane County.  PeaceHealth Medical Group • Barger Medical Building PeaceHealth Laboratories and Peace Harbor Hospital, • Downtown Eugene while based in Lane County, are separate business entities • Junction City with their own leadership teams and boards of directors. • RiverBend Pavilion For more information, visit www.peacehealth.org. • Santa Clara • South Eugene • University District • Nurse Midwifery Birth Center • PeaceHealth Check-up • 4J Wellness Clinic

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PeaceHealth Oregon Region By The Numbers JULY 1, 2010 – JUNE 30, 2011

FY 2010 FY 2011

Number of licensed beds: Sacred Heart Medical Center, RiverBend: 338 338 Sacred Heart Medical Center, University District: 104 104 Cottage Grove Community Hospital: 14 14 Employment Annual admissions: Sacred Heart, RiverBend 26,437 26,438 Data Sacred Heart, University District 2,794 2,661 Cottage Grove Community Hospital 437 413 Number of PeaceHealth TOTAL 29,668 29,512 Oregon Region employees 5,054 Days of inpatient service: Sacred Heart, RiverBend 101,326 105,963 Number of PeaceHealth Sacred Heart, University District 18,765 19,484 System employees based in Cottage Grove Community Hospital 1,182 1,075 Lane County TOTAL 121,273 126,522 265 Number of babies born annually: Sacred Heart, RiverBend 2,867 2,889 Number of registered nurses Number of surgeries performed: 1,618 Sacred Heart, RiverBend 16,260 15,996 Number of new hires Number of emergency-room visits: in past year Sacred Heart, RiverBend 49,355 51,717 668 Sacred Heart, University District 26,214 25,187 Cottage Grove Community Hospital 11,347 11,170 Average annual TOTAL 86,916 88,074 turnover rate Number of clinic visits: 10.5% PeaceHealth Medical Group 363,570 362,789 (industry average: 14.6%) PeaceHealth Medical Group Urgent Care 34,551 38,089 Cottage Grove Community Hospital/ Average annual salary South Lane Medical Group 41,491 53,173 (excluding executive TOTAL 439,612 454,051 and physicians) $58,898

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Revenue & Expenses JULY 1, 2010 – JUNE 30, 2011

REVENUE: For the first time in PeaceHealth’s EXPENSES: Every PeaceHealth employee is a history, government programs – Medicare and caregiver who is critical to our healing mission; Medicaid – were our primary source of revenue. compensating them for their outstanding work is our PeaceHealth attributes this slow but significant shift single biggest expense. Salaries, wages and benefits in payers primarily to the poor economy. For many account for 50 percent of our expenses, followed by people, health insurance was a casualty of lost jobs supplies and related expenses at 35 percent. With 5,054 and diminished income during the recession. Our caregivers, PeaceHealth is the region’s largest employer. data show that the number of people without any PeaceHealth paid $1,336,448 in taxes on property that insurance has gone up more than 30 percent in the is not exempt. Examples of property that is taxable past five years. The growth in the share of patients on because it isn’t in service to our nonprofit health care Medicare and Medicaid is concerning because these mission include property leased to commercial entities programs pay less than the cost of providing care. and paid-parking structures.

Total Net Operating Revenue Total Operating Expenses

39% Salaries & Wages 30% Commercial Insurance 1% Professional Fees 8% All Other Payers 4% Provisions for Bad Debt 3% Other Operating Revenue 11% Payroll Taxes & Benefits 14% Medicaid 10% Depreciation / Interest 45% Medicare 35% Supplies & Other Expenses

Value for Your Dollar Charge Per Discharge Sacred Heart Medical Center at $20,000 $19,736 $19,653 RiverBend and University District $17, 5 0 0 $18,218 consistently perform better than $16,712 comparable hospitals when it comes $15,000 $15,216 to providing value for the health care $12,500 dollar, as illustrated in the “Charge $10,000 per Discharge” graph. Our average charge is about 8 percent lower when $7, 5 0 0 compared to similar hospitals in $5,000 the state in terms of size or services $2,500

provided, or compared to other Heart Medical Center Sacred Heart Medical Center Sacred Heart Medical Center Sacred Oregon hospitals outside SHMC’s service area with similar tertiary volumes discharge services and/or All community hospitals in SHMC’s five-county area community hospitals in our region. $0 SHMC SHMC SHMC Benchmark Benchmark 2009 2010 2011 Group #1 Group #2 Data Source: OR Hospital Discharge Database 2012 2011 2011

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Community Benefit JULY 1, 2010 – JUNE 30, 2011

eaceHealth provides care to all Uncompensated Care Pin need, regardless of ability to $100M pay. When PeaceHealth is not paid $80M for services rendered, the losses are recorded as “uncompensated care.” $60M This includes shortfalls in payments under government programs $40M (Medicare and Medicaid), charity $20M care for those who cannot pay and bad debt for those who could pay but $0 do not. 2006 2007 2008 2009 2010 2011 Charity Care $31 5M. $38 8M. $44 4M. $47 4M. $52 .5M $64.2M In fiscal year 2011, PeaceHealth Bad Debt $17 2M. $16 8M. $22M $28 .5M $39 .5M $29.9M provided $94 million in TOTAL $48.7M $55.7M $66.4M $75.9M $92M $94.1M uncompensated care, exceeding last year’s record of $92 million. Of the Community Benefit & Capital Spending $94 million, $64.2 million* in care $200M was provided through our innovative Bridge Assistance program. $150M Serving the poor and uninsured is Capital Spending Capital Spending Capital Spending $85,780,000 PeaceHealth’s primary gift to the $5,800,000 $18,500,000 $100M community, but PeaceHealth gives back in other ways as well (detailed $50M Community Benefit Community Benefit in the chart labeled “Community Community Benefit $77,193,704 $73,705,740 Benefit by Type”). $60,530,656 $0 *Based on charges. 2009 2010 2011 $162,973,704 $79,505,740 $79,030,656

Community Benefit By Type

Charity care at cost $30,389,851 50% Unreimbursed costs of public programs at cost $16,033,863 26% Community health programs and services $753,039 1% Subsidized health services $11,559,324 19% Cash and in-kind contributions to community groups $660,120 1% Health professional education $1,134,460 2%

TOTAL COMMUNITY BENEFITS $73,705,740

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Monthly Milestones FISCAL YEAR 2011

JULY 2010 JANUARY 2011 Physicians at Peace Harbor Hospital in Florence are PeaceHealth Medical Group Urgent Care opens a second linked via a live interactive audio/visual connection to location at 3321 W. 11th Ave., near Fred Meyer. The clinic neurologists at the Advanced Primary Stroke Center at is open from 10 a.m. to 8 p.m. seven days a week. Sacred Heart at RiverBend to give rural patients access to medical experts in real time. FEBRUARY 2011 Oregon Heart & Vascular Institute hosts its 10th annual AUGUST 2010 Heart Fair to educate the public on risk factors for heart Low-cost sports physicals are offered at Cottage Grove disease and showcase the latest technology. High School and Creswell Clinic. Proceeds from the $20 examination MARCH 2011 are donated to local high schools to Sacred Heart Medical Center’s help replace sports equipment and Sleep Disorders Center presents its cover fees for students who would 10th annual Sleep Fair to help serve otherwise not be able to participate community members who have in sports programs. difficulty getting a good night’s rest.

SEPTEMBER 2010 APRIL 2011 Sacred Heart Medical Center at Sacred Heart Medical Center RiverBend is recognized in Modern receives the Organ Donation Silver Healthcare’s 25th Annual Design Medal of Honor for the hospital’s Awards for its healing environment efforts to promote organ donation. and the overall hospitality-inspired design. Also in April, the Lakeside Clinic in Dexter, Ore., becomes part of the A record number of PeaceHealth Cottage Grove Community Hospital employees participate in the United and Clinics network of care, Way’s Day of Caring on opening up the practice to serve September 20. more of the rural population in and around the Dexter area. OCTOBER 2010 Cottage Grove Community Hospital unveils its new chapel, MAY 2011 which received a major face-lift thanks to donations to the PeaceHealth Medical Group celebrates the first anniversary hospital’s foundation. of its new Nurse Midwifery Birth Center at 353 Deadmond Ferry Road in Springfield. The previous facility in Eugene NOVEMBER 2010 had served women and families for more than 20 years. PeaceHealth announces the integration of the Oregon Cardiology providers with Sacred Heart Medical Center JUNE 2011 to further strengthen the quality of service available at the The Oregon Bariatric Center at Sacred Heart celebrates Oregon Heart & Vascular Institute. its fifth anniversary. More than 600 people completed surgical weight loss programs since the center opened in DECEMBER 2010 May 2006. To better serve patients in Douglas County, Local businesses host toy drives during the holiday season Sacred Heart opens a satellite bariatric clinic on Mercy to collect items to brighten the days of pediatric patients at Medical Center’s campus in Roseburg. Sacred Heart Medical Center.

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