BUSINESS NEWS
Coast River Business Journal
June 2021 • 3
Local hospitals fi nished last year in the black
Story by Edward Stratton
Coast River Business Journal
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The coronavirus pandemic briefl y paused
nonemergency procedures and most patient
revenue at hospitals across the U.S. last spring.
But after federal stimulus and reopening,
Oregon hospitals ended 2020 with an oper-
ating margin — revenue minus expenses —
of 3.3 %, representing a $483 million profi t.,
according to statistics from the Oregon Health
Authority.
Columbia Memorial Hospital in Astoria
recorded a $16 million profi t after expenses,
an operating margin up two-thirds from 2019.
Providence Seaside Hospital posted a $5 mil-
lion operating loss, albeit from within the prof-
itable Providence Health & Services s ystem.
Zach Schmitt, the chief fi nancial offi cer
at Columbia Memorial, described the Asto-
ria hospital’s performance as a combination
of stimulus and savings. The hospital received
$8.4 million from the federal Provider Relief
Fund to off set losses. The hospital also reduced
its workforce , going from 714 employees in
December 2019 to 682 as of early May .
Columbia Memorial, overseen by the
nonprofi t Columbia Lutheran Charities, has
become among the most profi table rural hos-
pitals in Oregon over the past several years .
Erik Thorsen, the hosptial’s CEO, stressed the
importance of smaller, independent operations
staying profi table to reinvest and be ready for
shocks like the pandemic.
“In some ways, we have no one to turn to if
things go in a diff erent direction than we want
them to go,” he said. “So we have to be very
diligent, vigilant with our fi nances.”
Schmitt said the hospital saved through lay-
off s and by holding back on professional devel-
opment for employees, with many courses
canceled.
“We also withheld on a couple of large cap-
ital projects, like the renovation of our emer-
gency department, or rehab department,”
Schmitt said. “Focusing on the pandemic and
everything going on last year, we just didn’t
have the bandwidth to be able to do some of
those larger projects.”
The hospital quickly shifted many
patient-physician interactions online during the
pandemic, which Thorsen said has emerged as
a strategy moving forward.
The pandemic did not stop the chemother-
apy and radiation treatments at the Knight
Cancer Collaborative, a partnership with Ore-
gon Heath & Science University that helped
increase the hospital’s net patient revenue from
$112 million in 2017 to nearly $130 million in
2018. Net patient revenue grew to more than
$140 million in 2020, up 6% from the year
prior.
Without the federal stimulus and other
OREGON HEALTH
AUTHORITY
grants, Schmitt said, the hospital’s operat-
ing margin was around the 11% average from
recent years.
“Fortunately for us, we were able to shift
focus and continue on our path and our goal
that we had established several years ago,” he
said.
The hospital has been in expansion mode
in recent years, opening the cancer center and
new clinics in Astoria, Warrenton and Seaside.
It has been in the planning stages of a new hos-
pital expected to cost more than $100 million.
Thorsen envisions paying for it through a com-
bination of cash reserves, tax-exempt bonds or
other low-cost fi nancing and fundraising.
Providence Seaside regularly posts mod-
est operating margins to signifi cant losses each
year. The $5 million it lost in 2020 was a part
of the $306 million operational loss the Provi-
dence Health & Services s ystem reported .
But the 51-hospital system took in around
$957 million in federal relief, including $6.2
million for Providence Seaside. A statement
from Providence Health & Services in Oregon
said that federal relief helped continue opera-
tions and avoid layoff s at the Seaside hospital.
“Because we are part of a larger system,
we were able to continue to employ all our
caregivers and providers,” the statement said.
“Again, this is the benefi t of being in a large
health system (that) recognized the vulnerabil-
ity of our caregivers as well as our community
who needed services.”
The New York Times reported a year ago
how Providence had $12 billion in reserves
when it got the government support. The
health system invests the reserves and earned
$1 billion from investments in 2020, down
from $1.1 billion in 2019, according to trade
website Fierce Healthcare.
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