This page contains a single entry from the blog posted on January 22, 2008 3:12 AM. The previous post in this blog was It's a tossup. The next post in this blog is Grampy calls a foul on Sam the Tram. Many more can be found on the main index page or by looking through the archives.

E-mail, Feeds, 'n' Stuff

Tuesday, January 22, 2008

OHSU money woes: "It's all Jordaan Clarke's fault"

The bad fiscal news from up on Pill Hill took a turn for the worse just before the holiday weekend. Now they're going to lay off a couple hundred employees or more, because they're broke and have to start cutting some programs. This is disastrous news for the affected workers, and potentially catastrophic for some patients as well.

The management explanation of the move ranks among the most clutsy p.r. strategies in recent Oregon bureaucratic history -- and that's saying a lot. The reason for the layoffs and cutbacks, they say, is the Oregon Supreme Court's recent ruling that the statutory $200,000 cap on OHSU liability for negligence by its staff was unconstitutional. Now OHSU will have to buy actual malpractice insurance, and that's so expensive, the institution says, that it has no choice but to pass out the hundreds of pink slips. As the O reported it on Friday:

Oregon Health & Science University plans to announce today that it will cut 200 to 300 jobs, raise tuition by 10 percent to 25 percent, trim construction on Portland's South Waterfront, and restructure or close a score of clinical, research and education programs.

The cutbacks are OHSU's first specific responses to an Oregon Supreme Court ruling in late December that cleared the way for the family of a brain-damaged child to pursue millions of dollars in malpractice damages from the university.

The ruling effectively eliminated a liability cap of $200,000 designed to protect state agencies from major damage awards.

Tying the medical school's fiscal crisis to the court decision, in the case brought by the family of Jordaan Clarke, is such a flimflam. For one thing, OHSU has been crying the blues about lack of money for several months now. Even before the ruling, the high-priced prez of the institution was moaning about running out of money in 20 months, or some such thing.

Moreover, the adverse court case was certainly not a surprise. Everyone had seen it coming for quite a while. No one on the state's high court thought that OHSU's position had any merit. Neither did the Court of Appeals, which also ruled unanimously against the hospital on the issue that has now been resolved.

And so what's the responsible way for OHSU to react? One thing it could have done would be to go to the Legislature with a generous new cap -- maybe $2 million or so, to be automatically adjusted for inflation every year. With that in place, the next thing would be to bite the bullet, go into the market, and buy malpractice coverage, just like pretty much every other hospital and doctor you know does. Yes, it's expensive, but when your personnel violate established standards of care and wreck someone's life, the insurance is there to make the victim whole. That's how the law works for everyone else, and it should apply to OHSU as well.

Even if the docs didn't get the public policy job done in the last legislative session, surely they could be doing it right now, in the regularly scheduled "special" session that's about to begin. You get your high-priced lobbyist, you go to Salem, you cut a deal.

But apparently, no. From OHSU we seem to be getting a much different program. Whine about it. Lay off a bunch of people. Tell the world the sky is falling. Throw a tantrum.

It's not a sympathetic picture. And of course, the public wants to hear none of it. OHSU has been blustering and bullying its way around Portland for at least a decade now, most recently threatening to run to Hillsboro unless it got its way with its outlandish land use plans. It built its foolish health club building and infernal aerial tram [rim shot], blowing tens of millions and lying through its teeth about the costs. The folks running the place thought the school and its good buddy Neil Goldschmidt would make themselves a nice killing in real estate speculation.

But it didn't work out that way. The health club is reliably reported to be hemorrhaging money at the rate of $1 million a year. The SoWhat District biotech-nanotech fantasy self-deflated at the slightest pinprick. The tram, which cost OHSU -- what? $40 million to build? -- is now costing them probably a million and a half a year to run. Rumors are swirling that OHSU is still obligated by its contracts with the city or the condo weasels to build a new parking garage in SoWhat, at a cost in the mid-eight figures, over the next few years.

And when all these chickens come home to roost? Blame it on the justices of the Supreme Court. Blame it on those damn trial lawyers. Blame it on Jordaan Clarke.

My heart goes out to the people who are about to lose their jobs up there, but if they were smart, they'd realize where their gripe really lies. It's with Dr. Peter Kohler and his captive board, who created the mess the place is in today. And with their cheerleaders on the O editorial board, who helped them sell their ill-conceived empire and will continue to blow smoke around it long after the furloughed workers have cleaned out their desks.

In the end, the people of Oregon probably could be persuaded to provide more financial support to OHSU. But they're going to have to be convinced that the arrogance and short-sightedness that built the aerial tram and the toney salt-water swim club are things of the past. So far, we're not seeing any such change in attitude.

[Photos courtesy Miles Hochstein / Portland Ground.]

Comments (46)

Amazing, don't even wait to see what this will cost OHSU, lets just start cutting first.

The only good I can hope for out of this is maybe CoP will start thinking about cutting stuff when they see their SoWa project sinking fast.

Didn't I hear they were also closing the health club to save $$$?

Man, what a bunch of toads...

That's a shame if the health club closes. It was voted #1 wellness center by Portland Monthly.

If they close the health club, will they have any other purpose for the tram? I thought the docs at OHSU used it for moving to and from their workouts.

The Tram is so obsolete OHSU has prohibited patients from using it.

"OHSU figures the ruling will add $30 million a year in insurance and administrative expenses."

Since OHSU leadership has zero credibility it's safe to assume that number is inflated to cover their financial instability created by their horrific mismanagement, reckless decisions and fiscal irresponsibility.

Perhaps some journalist should make a public records request to see their books. Now that's funny.
When it comes to things like oversight they are a private corporation. They're only public when it comes time to pay taxes (so they pay none) and when they get other public support.

My guess is the running total damage done by Kohler's management is severe. Made worse by the impending malpractice cap outcome that Kohler and company saw coming.

Kohler, while partnering with the city's campaign of public deception to pitch SoWa, has risked OHSU's core missions, destroyed the Oregon Graduate Institute, sent VGTI packing for Florida, committed the institution to decades of wasteful spending and triggered millions being siphoned from city basic services through money laundering schemes in SoWa.
Much of which has resulted in enriching himself and and a number of other Portland's elite.

Some people knew this was coming.

From http://portland.indymedia.org/en/2003/06/266267.shtml

"Senator [Kurt] Schrader said, "Peter Kohler is a liar... he is extremely disingenuous" and "a poor steward of the medical community".
*Unfortunately our "representatives" seem to have a blind spot about the massive corporate welfare going to OHSU while people are dying from lack of social service funding
*We should not forget that in 2001 the Senate Democratic leader, Kate Brown, sponsored the giveaway of 200 million dollars of our money to OHSU for a business venture that even OHSU's own biotech guru, Dr. William New Jr., doubts will succeed.
Not only that, when questioned about the bill, Brown claimed to not remember what it was. She either lied or forgot about $200 million dollars. Either is completely shameful.

OHSU doesn't *have* to buy malpractice insurance. They can self-insure like many medical practices do now. It is a common practice in large multi-specialty groups to set aside a sufficient pool to pay for an actuarially reasonable number of malpractice cases. Removing the insurance company often removes the perception that the pockets are infinitely deep and increases the likelihood of a negotiated settlement that is fair and equitable for all. I know several large groups in town that do this.

"If they close the health club, will they have any other purpose for the tram? I thought the docs at OHSU used it for moving to and from their workouts."

Parking lot shuttle

The entire SOWHAT development, the Tram, the condos, the doctor's play pen, all of it... the biggest scam ever perpetrated on the taxpayers. The folks at Brainstorm NW were promised a meeting back in 2002 to go over OHSU's biotech business plan. Guess what? There was no meeting. There was no business plan.

Haven't heard that any of the high priced admin folks are taking a pay cut or better yet have resigned...
I bet no one would miss them.

Perhaps the City will sponsor a design competition for conversion of those tram cars to shuttle buses.

What does this mean to someone who might be, hypothetically, waiting to hear from OHSU admissions?

I remember what Randy Leonard had to say about SoWa/Tram oppositon.

"Most of the opposition to SoWa is the Lar Larson types. The same people trying to destroy our public schools"

Randy must think wasting 100s of millions of tax dollars is good for our schools?


Jack, best job of truth telling this year, I think you will not top this, this year. Congratulations of a fine job.

The economy is weakening from most accounts, and PDX city hall is levying new taxes. This is compounded because the schools and the county also are pushing even more tax levies. There should be a "none-of-the-above" option for this coming city hall elections. No new programs is a better course of government for PDX than the course driven by the current slate of councilors and Mayor.

Does "will have to set aside $30 million each year because there's no cap on damages" mean the same thing as "negligently injures patients by $30 million each year"?

So, what now? No more PDC help for OHSU? What happens if OHSU finds a reason in the development agreement not to build the parking garage, or finds a reason to do something else with the Schnitzer property? Should the PDC refuse to negotiate a new deal? Would that be throwing good money after bad, or is there some amount that should be spent to salvage whatever potential good is left down there?

I'm sure Brian Newman is reading this, and I'd be interested in his take on it.

My understanding is that OHSU had been asking to get the tort-cap increased, but they wouldn't because it would have raised it for all the other government agencies as well. Now there is no cap for anyone. (My understanding is that the court said any cap is illegal, so raising it won't help.)

In Washington they dealt with this situation by the state giving the University of Washington School of Medicine $37 million a year to fund malpractice insurance, instead of trying to have a cap.

re: design competition
Maybe Oscar Meyer will buy them as I think the trams could easily be converteded to "Weiner Mobiles".
That seems appropriate.

We all saw this coming!
Then to try to blame it on a kid who's life they ruined. How stupid do they think people are? Who does there strategic thinking? Who is in charge of the PR?

You know folks there's just no way to adequately convey the forest of red flags and fatal flaws so that people can grasp the magnitude of malfeasence involved.

The PDC already has millions being handed over to OHSU in the recent 5 year budget. Obscured in line items without any requirements. The cummulative amount is adding up to 10s of millions and they have and can do what they want with it.

The PDC already agreed to provide OHSU a low interest seperate LID (local improvement district) to finance their required building of the parking garage. The PDC has already paid them $3 million in advance for 100 parking spaces in the building while also allowing them to take the parking revenue from those same spaces until such time as affordable housing or other city uses needs them.
The LID financing willallow OHSU to inflate the building cost and add staffand administrative costs to skim millions for their bottom line.

ODOT/PDOT have recently stressed the Urgent need to get moving on the new I-5 fly over ramp & Macadam improvements to SoWa.
Brian Newman has recenlty suggested the $40 million earmarked, yet not entirely identified, for that desperate Traffic need be diverted to OHSU's Schnitzer Campus.

The PDC, OHSU and SoWa should be thoroughly investigated.
If Brian Newman is reading this, he's probably wondering why he left Metro.
Their shennanigans haven't 'yet' become so obvious.
For all the while this OHSU/SoWa calamity unfolds Metro & TriMet are pushing along even bigger recklessness.

"Who is in charge of the PR?"

The Oregonian editorial page editor's wife. Look out here's comes OHSU's editorial.

This is too rich.

October 26, 2005
PORTLAND, Ore. - Oregon Health & Science University has recruited a new leader for its media relations, institutional communications and publications department. Former journalist and strategic communications specialist, Lora Cuykendall [Bob Caldwell's wife], will join OHSU Nov. 14 as director of OHSU News and Publications.

"We enthusiastically welcome Lora to OHSU," said Peter Kohler, M.D., OHSU president. "Her wealth of experience, leadership and extensive business communications knowledge will serve OHSU well."
Cuykendall created her own strategic communications and public relations business. Most recently, she has been communications director for the Portland Business Alliance, greater Portland's Chamber of Commerce. She was also the founding president of Open Oregon: A Freedom of Information Coalition.

"This is an exciting time to be a part of Oregon Health & Science University," Cuykendall said. "OHSU's growth both on Marquam Hill and at the South Waterfront will improve the lives of Oregonians and those throughout the region through advances in care, teaching, research and discovery."

Wienermobiles - that might work. And OHSU could become Oscar-Meyer Hotdog and Sausage University.

What a wonderful editorial, Jack. You cut right through all the BS that OHSU has been feeding the public lately.

"My heart goes out to the people who are about to lose their jobs up there, but if they were smart, they'd realize where their gripe really lies."

Trust me, the people who are about to lose their jobs realize just who is responsible. And are also wondering why all of the vice presidents (18+) will still have their jobs and no salary cuts.

Great post Jack.

First one to lose their job should be recent hire Brian Newman.


Jim Newman here from OHSU. I wanted to correct a few things in your original post.

First, your piece suggests that OHSU did not have malpractice insurance prior to the Clarke ruling. Actually, the university carries two levels: We are self insured to $1 million. Excess insurance is purchased from external carriers for amounts over $1 million.

With the loss of the cap, we will need to increase reserves for self insurance and our premiums will greatly rise for excess insurance. This has resulted in the budget shortfall.

Your post also refers to our five year financial plan which is a separate issue from the tort cap. The financial plan's goal was to find efficiencies and cut costs because we needed to change our financial model based on a number of changing factors.

The financial plan, which came prior to the Clarke ruling, identified several cost cutting measures to ensure future financial stability. This is one reason why the additional $30 million annual impact of the Clarke ruling is so severe, because it comes following cuts and savings that already took place through the financial plan.

As for your comments regarding a new cap, OHSU hopes the legislature will take action to set a new cap for all public entities that provide unique and necessary services. OHSU's president has always had the position that the cap needed to be increased. He said so on his first day in office. However even with a new cap, the reality is that the financial impacts we face right now will remain the same for many years. This is because another court case will be required to test the constitutionality of a new cap if one is set by the legislature. This will likely take many years and until that time our insurance costs will remain high.

Finally, I wanted to point out one important thing missing from your comments. The reality is that the loss of the cap affects all public entities, not just OHSU. We are the first to react because we were a central participant in this key court case.

Thanks for the chance to respond.

Excellent editorial. Thanks for taking the time to tie all the threads up.

I still can't believe that OHSU had the nerve to close the tram to patients. How perfectly symbolic of their attitude toward the public that pays their bills.

OHSU had the nerve to close the tram to patients.

How could they possibly keep it open without the liability cap?

Sorry for the people who lost their jobs, but I think the people remaining at OHSU will feel much better about working there, knowing that a little boy who gets permanent brain damage caused by OHSU, will not be tossed back out the door. OHSU leadership should have been fighting for this result themselves rather than sitting around dreaming up development schemes that go nowhere. This was a matter of right versus wrong.

P.S. - OHSU did not close the tram to patients. Patients are invited to ride the tram and are given free passes as needed.

Late last year there were a couple of press stories about tram policies. The stories explained that inpatient (patients staying at the hospital) should not ride the tram because there is no ability to provide emergency care on the tram.

There were also news stories that clarified a policy to ensure that parking remains available at the Center for Health and Healing for people seeking care in that building.

However, again, patients are allowed on the tram.

Jim Newman,

I see you chose carefully what to respond to.

Pretty much like the last one here.
The vagueness of
"to find efficiencies, cut costs, change our financial model based on a number of changing factors" doesn't say much but I read the broader story before.
Yes your financial plan came prior to the Clarke ruling, but not without the expecting the ruling.

Worse in all of this is your claim of an "additional $30 million annual impact of the Clarke ruling".

I don't buy it. Not even close. I think your hierarchy found that number to be useful as it enables you to lean on that problem while obscuring fiscal mess OHSU management created.

Since you are a "public entity" can I 'public records request' proof of that claim?

Perhaps you can document that claim with a simple summery here?

The press stories on discouraging patients from using the Tram made no mention of "inpatients(patients staying at the hospital)" only.

Mighty kind that patients are allowed on the tram. However during the Tram hype it was said that patients in the hospital could be easily moved to research facilities via the Tram.

You haven't responded to most of the more serious concerns above.

Since your president said, before the ruling, that OHSU will be cutting back on internal funding research, why are you getting millions from SoWa borrowed TIF money?
Are you using City-borrowed Urban Renewal money (that has to be paid back with property taxes you don't pay) to subsidize your financial plan?

Another insightful post.

Two words (again):


We need you Jack. We need your magic.

Jim Newman,

Can we assume the tuition increases and layoffs will prevent OHSU from raising prices on health consumers?

If not....

What is the price increase on a pediatric E.R. visit (no imaging, no specialist, no treatment)? The last time we we visited (after our 3 year old fell from a chair), it was $725 for about one hour of service.

What is the base price increase for an overnight stay in your hospital?

In my experience, health care liability costs are embedded in the price of every
$15 Tylenol and every basic service.

Can you provide a summary of your liability budget that highlights the self-insurance and liability insurance premium costs which you expect to incur?

Shorter Jack Bog:

"I told you so!"

This isn't an open forum with OHSU and Jim Newman will not be answering questions.
He chimed in to spin out some damage control and that's it.

OHSU is a private corporation when it comes to answering questions.

But tax exempt as a government agency with PERS employees.

The PDC and other players must be jealous.

Mr. Newman:

In light of the dealings of OHSU with the tort cap AND the tram *rimshot* scam, I find the institution to have been, and still be, in violation of at least four of its "Nine Principles of Integrity", to whit:

Integrity: Act honestly, speak truthfully, be trustworthy

Ethics: Do the right thing, even if no one is watching

Respect: Treat everyone with respect regardless of their role

Interaction: Speak and listen to one another

Plus, they've probably repeatedly violated their own "OHSU Code of Conduct".

Given this, I'm surprised that any employee, or, for that matter, any patient, or any citizen of this region, would trust anything which OHSU might announce.

The amount OHSU sunk into the assinine tram *rimshot* project, by the way, is AT LEAST $48 million dollars (85% of the vastly over-inflated $57 million, plus, the idiotic project cost to build) and it has undertaken the responsibility of maintaining the thing at a million plus per year.

$48 million is more than enough to cover the shortfall for the liability for butchery done by those you call surgeons.

How many of those involved in the misguided tram *rimshot* project will be on the layoff lists? I'd bet not a one. Just watch....Let's see if Steve Stadum, Executive Vice President of Follies and Jimcrack Ideas, lasts into this year.

OHSU has NO integrity. Lies, obscuritanism, prevarications and quick-step shuffles in their dealings with the public should guide those who HAVE health insurance to seek other resources in the community for health care. You should hear the lies they tell the employees, particularly every union negotiation session.

Oh...and being that far in the hole has got to cost more. But, hey, just shift it over to the insured patients, keep their mouths shut, and bemoan the ever-rising cost of health care. *wink, wink*

I think that OHSU could sell the tram to AstraZeneca, the makers of Nexium. They could then paint the tramcars purple. Even tho' Magic Bullet rectal suppositories might be more to the point.

The article I read on the tram patient ban said specifically that patients should park in the parking provided up at their destination building. Nothing was said about inpatient vs outpatient.

Reducing auto traffic up and down the hill was given as the primary reason for the tram, wasn't it? That's an excellent purpose, if it is real, energy efficient in operation and used as fully as possible. Are we getting greenwashed?

The resources of OHSU are a public trust of the people of Oregon. OHSU management needs to show that they are being good public stewards.

If OHSU gives passes for free parking up on the hill, but not for the tram, how do you call that a trip reduction strategy?

This is from the tram's own web site....

OUTPATIENT INFORMATION --- All OHSU outpatients and members of the public can ride the Tram by paying the roundtrip fare (currently $4.00).

If your physician refers you to another OHSU clinic for an appointment on the same day, AND that appointment is at the opposite end of the Tram, the physician's staff can provide you and accompanying family members with a Tram pass.
• If your physician refers you to another OHSU clinic for an appointment and it is NOT on the same day, you will not receive a complimentary Tram pass. The physician's staff will ask you to go to the campus where the clinic is located for your appointment.
• For patients planning to commute by car to visit your OHSU care provider, please be aware the Portland Aerial Tram is not a free "Park & Ride" option. OHSU provides an ample amount of free parking on-site for patients, as well as their family members and visitors.

Did you mention that OHSU's President had ALREADY stated, with regard to Jordan's injuries, the cap was too low and needed to be raised....BEFORE this went to court, but they insisted on having the courts involved anyway?

Did you mention that OHSU is now THE ONLY teaching hospital in America to have NO CAP AT ALL NOW? This is something that I do not get - why should they have NONE AT ALL? So now I can sue them for......200 MILLION? And that's somehow "right"?

My husband works there and that is what he told me. Now I'm all for their being responsible for Jordan....but to have NO cap AT ALL? That's ludicrous and most folks in this country must know that since no other hospital (comparable to OHSU) has NO CAP AT ALL.

And it isn't the fault of those 200-300 people getting laid off that he was injured, but you're OK with their families paying for it? I'm not sure I'm OK with that.

I HATE business as a general rule and have NEVER defended one before - ever, but c'mon, this is overboard and it's OHSU's patient's (not OHSU big shots) that WILL pay for this unrestrained ruling.

Hm.......is that really a "good thing"? I don't think so...

As I've said for years now (and say again in this post), let's try something like $2 million, automatically indexed for inflation, and let's have OHSU just shut up and accept it. Instead they'll get their Arrogant Doctor on, go down to Salem, and strut around saying "We'll start the bargaining at $500k." Fine, Doc. Go operate on yourself.

Just wondering what this will do to those of us with actual medical damages we are incurring because of malpractice. I'm not a sue happy type person had something BAD happen during surgery that could of been corrected if the doctors would of listened to me when complained..... OHSU actually was who disclosed what they did (after several months of questioning and complaining).... but never followed through with fixing me completely..shammed me off like I wasn't telling truth. I just want what I am owed.. not millions so how do those of us get heard when they are dealing with people with larger much more complicated and severe cases??? I just want medical, lost wages and money to go to school to retrain since I lost my job due to too much time off. Plus now I am finally well enough to drive to a psychiatrist who is helping me shake out of my nightmare. Would be nice if OHSU would just pay his bill.

It is interesting that many of you who post think that OHSU deserves this. I agree that the Tram and the SoWhat developments were excessive and unnecessary. I agree that many of the executives at OHSU should be shouldering more responsibility for the financial ruin occuring there. However, I take exception to the thinly veiled contempt levelled at doctors and surgeons. As a health care professional I feel that the record needs to be straightened. A doctor that makes a mistake is not a "butcher", simply a human being. Since when in history were we expected to be perfected automatons that delivery perfect outcomes to every medical situation. Less than 100 years ago, death was a common during and after surgery. Childbirth, dental infections, heart disease, etc. had high mortality rates that have been greatly reduced with advances in technology and TRAINING. However, where is the guarantee posted that gives every patient a perfect outcome or "their money back plus damages". Our litigious society, especially the trial lawyer lobby has successfully lined its pockets by pushing the myth that everyone is guaranteed perfection at the hands of human medical practitioners. Another common assumption is that because doctors make a nice living that they are held to this standard of perfection. Research average salaries of the highest paying jobs in the country and you will not find physicians or dentists in the top 10. The fact is that they do make a decent living compared to the sacrifice of time and study that they pay when they are young. Bad things happen, but most doctors that I have met and associated with actually do have patients best interests at heart. The accusations make it sound as if maleficence is rampant. This is ridiculous and untrue. The reality is that the heavy majority of people do have an end result that is positive. Let me come to your place of work and sue you every time you make a mistake. You cowards wouldn't be able to stand up to the pressure of the public looking over your shoulder constantly for perceived faults. If you have a problem with OHSU, that is fine. However, calling the physicians butchers reduces your argument and demeans your own intelligence.

I didn't expect perfection and I know that mistakes happen but my physician should of taken my complaints seriously.... if they would of listened I could of been fixed earlier. All my complaints were pretty clear complication.

When I make a mistake I admit to it and I do everything to fix it. I also worked in a field where I could be sued for my actions and I take that seriously.

Clicky Web Analytics