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This page contains a single entry from the blog posted on November 4, 2005 3:00 PM. The previous post in this blog was Fascinating. The next post in this blog is Old friend. Many more can be found on the main index page or by looking through the archives.

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Friday, November 4, 2005

You can't have it both ways

My latest rant on the aerial tram [rim shot] included my strong objection to the notion that the contribution of OHSU toward the tram's construction cost should be listed as "private" money. Since OHSU is a state agency and gets most of its revenue from the taxpayers, I argued, its share of the budget should be considered as "public," just as the city's is.

As if to prove my point, along comes a new controversy involving OHSU in which that institution hides inside a cloak that says "governmental agency." This just in from State Sen. and gubernatorial hopeful Vicki Walker:

Eugene -- Senator Vicki Walker (D-Eugene) is drafting legislation in response to news she learned late last week about the injustice being served on patients at Oregon Health Sciences University (OHSU).

Jordaan Michael Clarke, was born at OHSU on February 20, 1998, with a congenital defect of the heart. On May 21, 1998, surgeons successfully operated to repair the defect. While in recovery in the Surgical Intensive Care Unit, Jordaan suffered from prolonged oxygen deprivation leading to permanent and profound brain damage. A lawsuit was then filed. According to legal briefs filed in the case, "As a result of these injuries, Jordaan is blind, quadriplegic, uneducable and totally dependent on care givers for all aspects of his daily activities and care."

OHSU admitted negligence in the case when the lawsuit was filed. Jordaan�s medical expenses are already in excess of $200,000, and the cost of his lifetime care is estimated to be more than $11 million. An expectation exists that OHSU's medical malpractice insurance would cover the claim to a significant degree. Not so. OHSU claims sovereign immunity as a state agency and skates under a little known law called the Oregon Tort Claims Act (OTCA) that limits recovery to no more than $200,000. Given that Jordaan's medical expenses exceed the recovery limit, the costs of his care now fall onto the taxpayers of the state of Washington where he currently resides.

"While Jordaan's case is an outrageous affront to the sensibilities of any Oregonian, it is not unusual," said Sen. Walker. OHSU has paid out millions in claims under the OTCA over the last decade; there are currently 5-10 cases pending at the trial court level, and at least two on appellate review challenging either the dollar limits of the OTCA, or the constitutional argument that OHSU is not a state agency. The Department of Justice was unable to confirm how many actual cases exist, because litigants are not required to notify the Department of challenges to the OTCA at the trial court level.

"OHSU exists in the same fantasyland as SAIF Corporation," said Walker. "They are public corporations created by statute, operating as private businesses, but claim state agency status when it suits them," she added. OHSU became a public corporation in 1995 when the Oregon Legislature cut it loose from the state system of higher education. Currently, OHSU receives 3.6% of its total operating revenue from the Legislature to help meet its public mission, and yet is among the bottom tier of hospitals who provide uncompensated care (36 out of 55 other Oregon hospitals have higher rates of uncompensated care).

"It is alarming to me that patients walking into OHSU's hospital and clinics are unknowingly walking into an uninsured facility," said Walker. "While OHSU continues to suck public funds for a tram that has tripled in cost before its even built, people like Jordaan Clarke and his family will live in abject poverty at the mercy of state care givers because OHSU escapes accountability under state law," Walker added.

In response to this case and others, Senator Walker has requested Legislative Counsel to draft three bills for introduction next session: one will eliminate OHSU's ability to claim sovereign immunity; the other requires all statutes regarding public bodies to apply to OHSU (currently they are excepted if not specifically mentioned); and, in the event sovereign immunity is not lifted, implement a notice provision that OHSU must notify all patients that OHSU is subject to the OTCA and thus recovery is limited by statute.

In the 2005 Legislative Session, Sen. Walker introduced SB 989 that removed sovereign immunity from state agencies in contempt actions. That bill did not receive a hearing. Sen. Walker inserted the provisions of SB 989 into SB 310, the SAIF reform bill, but when the governor threatened to veto the bill on that basis, Walker had the bill sent back to committee.

"The governor has sent a clear message that we will have an uphill battle to remove sovereign immunity from state agencies, including OHSU. If I am elected governor, I would not only push to bring justice to Oregon families and taxpayers, I would demand it," said Walker.

The Jordaan Michael Clarke case was argued before the Oregon Court of Appeals last Wednesday, October 26, 2005. For more information about OHSU�s escape from justice, see Willamette Week, "Storming up the Hill," Maureen O�Hagan, 1999.

Go get 'em, Vicki! And those of you out there who are trying to put OHSU in the "private" column for the hideous aerial tram [rim shot] budget, give me a break.

Comments (29)

Uh, but this article is basically about them trying to claim "public" status even though they're basically a private agency. I mean, 3.6% of their funding comes from the state? They really are 96.2% private, then, and thus it seems likely that not much taxpayer money is actually going to their share of the tram budget.

Or am I reading this wrong? It seems like you're doing the same thing and slamming them for being a public agency in the last post, and then slamming them for being really-private-but-pretending-to-be-public in this post?

I'm all for them being treated as public, all the time. I don't want it both ways, either.

However, that's not to say they should be able to use "sovereign immunity" to avoid paying for medical malpractice. That's a separate issue.

BTW, the other 96.2% is mostly federal government grants. That ain't private. Read the original post and comments.

Oh, okay, thanks.

rim shot
This percent, that percent.
One thing is for sure they are 100%
exempt from property taxes.

There may be other taxes they are exempt from as well.

Their doctors group (OHSUMG) who owns most of the new building going up at SoWa is a 501c3 and is exempt
from the TriMet payroll tax.

That's fine. No 501c3's pay the TriMet payroll tax.
Few are getting other public subsidies though.

There are some pretty smart people here.

Does anyone know if OHSU pays any TriMet tax?

How about business taxes? Does OHSUMG and OHSU both pay them? Neither?

Are all OHSU and OHSUMG employees on PERS?

Let's put it all on the table and see if it makes sense.

The ongoing incremental look at OHSU needs to be replaced with a full picture to better establish the legitimacy of other public contributions such as the Tram [rim shot] and Urban Renewal money and infrastructure.
The PDC/SoWa budget has 3.1 million earmarked for OHSU this fiscal year.
The taxpayers are funding all sorts of infrastructure for SoWa and OHSU.

From my current angle it appears OHSU and OHSUMG should be paying for the entire cost of the Tram [rim shopt]including the yearly operating expense.

Back to the tram for a minute.
What is the probability of this thing being shut down during bad weather, or high winds?
M.

And what will the liability insurance cost? And who will pay to operate the thing? Nobody's saying publicly. But darn it, we're going to build it, no matter how stupid it is.

Hi Jack,

The tax breaks enjoyed by 501c3s are enormous; you've just hit on the tip of the iceberg. The health care sector's dirty little secret is that some of them are enormously profitable; and, for the most part, there's no means test to determine who gets the tax breaks.

Hospitals in Oregon are a $5+ billion a year business. There are about 59 of them and as a group their net income was over $343 million last year alone. With 600,000 people uninsured and another 350,000 on Medicaid, that's an amazing amount of money earned by these hospitals.

The most amazing thing about OHSU is that, as you correctly stated, they get it both ways. They enjoy the privileges of a public hospital while behaving like a private corporation. It's time to cut the umbilical cord; the OHSU Board certainly knows it. (See the article in the Oregonian from last February I believe where they stated their business goals were no longer to care for the poor, but maximize their bottom line)

So, why the Governor or the Legislature doesn't do it is beyond me.

On the off chance that some of this is related to our exchange on the previous post, I don't dispute that OHSU gets its money from public sources.

However, Jack, you've argued that police, fire and parks would suffer from the cost of the tram, and with the city share at 15% or whatever, all those OHSU dollars don't detract from those city services.

It's clearly fair game to call it a boondoggle, but it's not accurate to imply that all of the cost comes out of city coffers.

Watcher, I held back last time. Not this time.

Sabri
http://laws.findlaw.com/us/000/03-44.html

"Liquidity is not a financial term for nothing; money can be drained off here because a federal grant is pouring in there."

I've got a dead sole that needs answers (against OHSU) . . . but RICO works only against monetary loss not death. Nice huh? Linn and company have a duty but fritter the money away.

I have confirmed that OHSUMG is a 501c3 but is OHSU also?
If so they do not pay the TriMet payroll tax which IMO is one of the more twisted apsects of their whole story.

and what about local business taxes?

Slightly off-topic, but OHSU's liablilty limits should be a strong disincentive for anyone to use their facilities for any procedures that carry a risk of expense malpractice claims.

Also slightly off-topic (but more relevant). It's about time Portland disabused itself of the mindset that federal money is free money. "It would be stupid not to tear up the bus mall and put in a MAX line because the feds are providing matching funds."

"We should spend scarce tens of millions on counterproductive cr*p because we can get it for half price."

I don't know if it's possible to dispose of this redherring or now, but I wouldn't rely on the "it receives federal grant money, therefore it's public" line of reasoning in this case. Federal grant money, especially in the form of NIH research grants, goes to all kinds of facilities, public and clearly private, and probably wouldn't suffice as a determining factor.
On the other hand, as noted in the other post, having a board of directors appointed by the governer, and being formed under a statute of the state sound like much better determinants.

While you're on that, who owns the patents on these drugs that are designed up there with tax dollars? Do you think the taxpayers do? While I'm not sure, I have a strong feeling that's another part of the scam.

Watcher writes However, Jack, you've argued that police, fire and parks would suffer from the cost of the tram, and with the city share at 15% or whatever, all those OHSU dollars don't detract from those city services.

In the context of all the Urban Renewal and System Development Charge (SDC) money being spent to promote SoWa --including the Tram-- that's money unavailable for other purposes.

For example, when Parks spends $1.8 million in SDC funds to help PDC buy property for a park in Sowa and promises to pay for its future operations and maintenance, those are future General Fund dollars being committed. General Fund dollars that could otherwise go to police, fire..or even other park priorities.

When Vic Rhodes was director of the Office of Transportation, he was very skillful at pulling money out of a hat to fund cost over-runs on projects like the streetcar. Now that he's retired and heading up the Tram project, we can expect new "creative" ways to make up the projected --and no doubt continuing-- shortfalls. (Mind you, I don't fault Vic for his creativity...)

I'm curious about not just Tri-Met and business taxes, but the property tax base, particularly in regards to the SoWhat project.

I know that gifting to OHSU is tax deductible, as the Schnitzers gifted a portion of the land involved in the whole SoWhat district to OHSU, presumably for some kind of tax right-off against other profits. The thing is, how does "tax increment financing" work in an urban renewal district where there is no, or limited, property tax?

Then, as regards the tram, there are externalities that are not being considered at all...additional costs to the taxpayers in the City of Portland because a trams requires highly sophisticated rescue equipment and trained personnel in the event of some problem arising. They'll need to have it and be able to use it (which means ongoing training) even if it is never used. That's a cost which is not negligable in terms of either fixed or operating costs.

Then, there's the whole issue of the safety of a "signature" project like and aerial tram. The land upon which the current OSHU campus is built is the MOST UNSTABLE in the entire metropolitan area in the event of a 7.0 or greater earthquake. I don't see it as particularly wise to built a hideously expensive transportation system that can be easily destroyed, with almost certain mortality to those using it, in one of what is expected to be Portland's most likely disaster scenarios.

Then, when they began promoting the tram as a "signature project", that would garner attention from the world, I thought of the world in our current state and immediately thought that "signature project" is the same as "target".

Bad project, badly planned and now being poorly executed.

Funny?
http://www.portlandtram.com/031505.htm

March 15, 2005
"Todays South Waterfront update included a new $40 million budget for the Portland Aerial Tram and related projects, a figure that retains the trams innovative design and includes significant funding for neighborhood improvements and safety enhancements. The projects budget has also been adjusted to account for the steep increase in the price of steel and a weak U.S. dollar. Additionally, it includes a healthy contingency fund to address any unforeseen costs that might arise during the next 18 months as construction progresses."

Merits of OHSU's status aside, Vicki Walker is a publicity-seeking nutcase who, if you peel back her latest outrage, is probably neing funded by the Trial Lawyers. just as she was being given bux deluxe by Liberty Mutual when she tried to ABOLISH SAIF...Remember this is a woman who joined the legislature to prevent any more cute teenage girls like her daughter from having to endure a wet t-shirt contest on a spring break charter flight..

The thing is, how does "tax increment financing" work in an urban renewal district where there is no, or limited, property tax?

When the County bought the old Benj Franklin --then US Bank-- building on the east side of the Hawthorne Bridge, taking it off the tax roles, it suddenly cut the East Side's urban renewal resources. Tax increment financing counts on...tax increases. Between OHSU, and tax deferrals, there's a big issue of just where all the tax increases on newly developed properties are going to come from in SoWa. Probably why Parks had to kick in $1.8 million in Parks SDC funds for that land purchase for the future park...and why there's NO money right now to start developing the Greenway.

TIF is the weapon of choice for public officials and planners enamored with playing big time developers with other people's money.
Watching the mix of efforts by various government agencies it has become abundantly clear that NONE of them represent the public's interests or concerns with any of the activities and projects they involve public money with.
Quite the contrary in fact.
The same agencies (and electeds) charged with fiduciary responsibilities and oversight are working in concert to marginalize, neutralize and work around every fatal flaw and questionable practice and expenditure raised by the citizenry.
With every Urban Renewal District large swaths of land adjacent to the targeted developement is included within the district in order to divert
larger amounts of existing property taxes otherwise headed for the GENERAL FUND and our schools.

I still can't believe this project is happening. The argument put forward for this tram can be paraphrased as "Because its cool." In a time where schools and jails are under funded magically we as a community can afford this.

It wasn't enought that the street-car was an inefficient way to provide mass-transi. Nope, the city of Portland decided to show us what truly inefficient and expensive could be.

And I hate to say it but half-off in Portland is still more than full price anywhere else for a project as they throw goody after goody into the mix.

The problem gets more widespread when you consider the use of tax abatements to get high-rises built. In order to sell a million dollar condo a property tax break is usually required (it might not be in this market though).

Does anybody know if the city has issued tax abatements to the earlier project that have filed for permits?

Can't you just see it? The California exec has come up front to ride shotgun with his driver/security man in the company up-armored Cadillac Escalade. They've cleared the Terwilliger Curves going north on the super slab, come down the hill to the sweeping left curve and there before them is a mesmerizing vision of utopian future. The phallic tram tower rises beside the freeway, conveying the translucent seed capsule up to OSHU. In the middle distance a forest of SoWhat condos rise creates a louvered view of Mt. Hood.

In an impulsive turn they veer downtown to shower corporate billions on these enlightened people.

Vicki Walker is a publicity-seeking nutcase

Er, that's not allowed here.

How about 'Vicki Walker is a publicity-seeking candidate for governor.'

Jack,
Who are you quoting here?

"We should spend scarce tens of millions on counterproductive cr*p because we can get it for half price."

No one said that. I think posters are rightly objecting to your implicit claims that OHSU is "public" and therefore OHSU expenditures for the aerial tram [rim shot] are "public" in the same way general fund expenditures are.

That is simply not correct.

It was a bit interesting to see the Orwellian publish this weekend with a piece on medical malpractice and the failure of two of the big hospitals in Portland to report their errors.
Interesting in that it was about six years ago that the Inst. of Medicine came out with a report that 44,000 to 98,000 died annually from medical errors. That would probably mean that 500 to over 1000 Oregonians died annually from medical errors. It has taken the "O" this long to wake up.
It would also be nice to know what the other hospitals in the state are doing regarding their reports. Maybe we have gotten all we can expect from the "O".
Smudge King

"I think posters are rightly objecting to your implicit claims that OHSU is "public" and therefore OHSU expenditures for the aerial tram [rim shot] are "public" in the same way general fund expenditures are.

That is simply not correct." ~Paul

No, you are not correct. OHSU _is_ a public entity, a public corporation, to be exact. It is supported by public funding, federal and state. It's governing board of directors is appointed by the governor of the state. Any funds it expends are "public expenditures".

OHSU is public.


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In 2009: 67
In 2008: 28
In 2007: 113
In 2006: 100
In 2005: 149
In 2004: 204
In 2003: 269


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