Legacy Salmon Creek administrator looks back at his and the hospital’s first year
Legacy Salmon Creek Hospital sports a lot of new features. Jonathan Avery is one of them. At least he’s new as the head of a hospital.
Avery worked in health care administration with Legacy Health Systems for the past nine years before being named vice president and site administrator at Legacy Salmon Creek. In fact, he’s spent his entire post-graduate career with the company, beginning as an administrative fellow. For his undergraduate degree, he studied finance and management at the University of Oregon, and later earned his master’s in health systems administration from the University of Michigan. He said he knew he wanted to work in health care while at U of O, after completing a summer internship at Yakima Valley Memorial Hospital.
"It (working in health care) seemed much more fulfilling to me than the other things I’d studied in college, which involved being a stockbroker or manufacturing soap," he said.
For his senior thesis, Avery chose physician recruitment as his subject – a topic that would prove a priority in his first post as director.
As the facility geared up to celebrate its birthday Aug. 22, Avery met with the VBJ to look back on the first year for the new 460,000-square-foot facility.
"It’s been an incredible ride; that’s the best way to describe it," Avery said while making his rounds, visiting departments throughout the hospital. He’s met with cheer by the staff, and nurses joke about the need to sit up straight when he makes his entrance.
Avery speaks well of the things that make the new hospital special, such as the dedicated pediatric department – something conventional hospitals don’t always offer – and the paperless patient records system. He shows off the ultra-modern facilities and such innovations as suite-style accommodations for visiting families. For a man new to the post of hospital administrator, he doesn’t sound as new as LSC looks. And as prepared as he is to showcase the facility, he is equally so when asked about the hospital’s rough first year. Legacy Salmon Creek lost $27.9 million dollars since opening last August, more than double what was expected.
"When we started, we did have lower than expected volumes during the first few months," Avery said. "And it happened for a couple of reasons. We had planned to have facilities up for our on-site doctors, but that was behind schedule."
Avery said the Medical Office Building, designed to house more than 100 physicians, fell several months behind schedule. This unex-pected glitch displaced the lion’s share of doctors planning to practice at the hospital.
"I think, from a physician’s perspective, it’s not efficient to practice at a hospital if you have to do it out of your car," he said.
Another factor that affected the substantial loss was an unforeseen volume of Medicaid payments, which pay well below cost.
"Our Paramix has been less-than-favorable than what was hoped for," Avery said, referring to the sum-total of patient payment types. Avery had expected 10 percent of the Paramix to include Medicaid. Instead, the hospital handled double that number.
"We had expected that our Medicaid payments were going to be similar to other hospitals in the Portland area," Avery said. "(A Medicaid account) is essentially an unfunded case where we’re not going to make any money, and that is a big part of what contributed to our losses being better than expected."
Comparatively, of the hospital’s 34,000 patients seen and 1,125 babies delivered during the year, 37 percent paid through commercial insurance, 7 percent were self-pay accounts and 3 percent paid through private insurance. In terms of charity and bed debt expenses, the hospital ate $9,765,137.
Medicaid aside, Avery said he knew when the hospital opened that they would not make their projections, due to the delays in completion of the Medial Office Building as well as construction of the Vancouver Clinic, which brings 100 specialists and 300 health care professionals to the campus.
"I think in retrospect, we all feel that our initial projections were far too aggressive compared to the reality of the timing of opening the building and moving physicians in to the offices," Avery said.
The stumbling start for the hospital was cause for Avery and his cadre to sit down and consider their options. The standard tactic of cutting costs or even employees in an attempt to stop the flow of red ink was ultimately not embraced.
"We had made a commitment to about 600 people when we opened this hospital," Avery said. "So, there was no way we were going to trim hours or let people go in our first four months of operation. We weathered the first four months."
Avery said the decision was the right thing to do for the staff – which is compensated to the tune of $50 million – and that it was the best business decision. Still, it is clear from his words that Avery and his crew wondered how long the squall would lash the ship, and exactly what damage it would do.
The decision to hold the course paid off. The volume did pick up, once the doctors’ of-fices were completed in January.
Now that the seas are calm, Avery can look back on those sketchy months and comprehend them in the form of numbers on a chart. The total number of occupied beds in the hospital remained below 46 for the first three months – Avery had expected 70. Meanwhile, only 66 doctors practiced out of the hospital in November. That number spiked to 98 in January, and the bed census swelled to 62. Also, 101 babies were born at the hospital that month – the first jump above 62 since opening day.
Today, there are 149 practicing physicians at the hospital; a good jump from the 36 that called the LSC home in September. These are numbers Avery likes. And while the facility has gained its stride as it enters its second year, the director remains watchful as a still-new helmsman.
"It’s been a huge learning experience, obviously," he said. "It’s the first time that I’ve worked directly in hospital operations in this way, and so I’m learning something new every day. Every minute, just about."
