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A6 Friday, May 21, 2010 • THE BULLETIN
Hospital Continued from A1 In the beginning of 2009, St. Charles bumped prices up 13.5 percent, nearly twice as much as it had in previous years and more than other hospitals at the time. Though commercial insurers, and people with commercial health insurance, pay lower negotiated rates, the price increase extended there as well, Shepard said. “We did make huge efforts with the commercial contracts and renegotiating those commercial contracts for larger price increases. So that helped our revenue for 2009,” Shepard said. When the price goes up for hospital services, there’s a direct link to higher premiums and higher co-pays, said Steve Sause, a provider executive at Regence BlueCross BlueShield of Oregon. Sause would not confirm if the amounts Regence paid to St. Charles had gone up in 2009, citing the confidentiality of the negotiations. In addition to finding ways to add revenue, St. Charles reduced expenses. The total amount spent by the organization increased in 2009, though by less than half the amount it had increased in 2008. St. Charles cut salary costs, its largest expense, by laying off or reducing hours for more than 100 employees in February 2009. It also cut salaries for all nonunion staff members in early 2009; those employees’ full salaries have been reinstated. In another expense cut, the organization reduced pay to some doctors who serve as medical directors for hospital programs, Shepard said, and found ways to reduce the amount paid for various supplies and services. These cuts, as well as the price increases, were necessary to maintain a healthy balance sheet, said Shepard, because the number of patients coming into the hospital has remained flat since the end of 2008, and those who are coming are not staying as long. In 2008, the Bend hospital had 14,367 discharges; in 2009
Reform Continued from A1 Democratic congressional leaders and the Obama administration must now work to combine the Senate measure with a version approved by the House in December, a process that is expected to take several weeks. While there are important differences — notably a Senate provision that would force big banks to spin off some of their most lucrative derivatives business into separate subsidiaries — the bills are broadly similar, and it is virtually certain that Congress will adopt the most sweeping regulatory overhaul since the aftermath of the Great Depression. Passage of the bill would be a signature achievement for the White House, nearly on par with the recently enacted health care law. President Barack Obama, speaking in the Rose Garden on Thursday afternoon, declared victory over the financial industry and “hordes of lobbyists” that he said had tried to kill the legislation. “The recession we’re emerging from was primarily caused by a lack of responsibility and accountability from Wall Street to Washington,” Obama said, adding, “That’s why I made passage of Wall Street reform one of my top priorities as president, so that a crisis like this does not happen again.”
Obama to have hand in final bill The president also signaled that he would take a strong hand in developing the final bill, which could mean changes to the restrictive derivatives provision the Senate measure includes and Wall Street opposes. It is also likely that the administration will try to remove a special exemption passed by the House that would shelter auto dealers from oversight by a new consumer protection agency. Earlier, Obama had criticized the provision as a “special loophole” that would hurt car buyers. The Senate bill, sponsored primarily by Sen. Christopher Dodd, D-Conn., and chairman of the banking committee, seeks to curb abusive lending, particularly in the mortgage industry, by creating a powerful Bureau of Consumer Protection within the Federal Reserve to oversee nearly all consumer financial products. In response to the huge bailouts in 2008, the bill seeks to en-
Financial performance of St. Charles Health System St. Charles posted its largest operating income — the amount left after expenses are subtracted from revenue — since at least 2005.
Operating income In millions $30
$25m
25 20
$17m
15 10 $9m 5
$1.1m 0
-$615,000 -5 ’05
’06
’07
’08
’09
Source: St. Charles Health Systems Andy Zeigert / The Bulletin
“With the high number of uninsured in Central Oregon, there will be a continued high number of charity care or fewer patients who can pay.” — Bill Kramer, independent health care consultant it had 14,426, according to data from the Oregon Association of Hospitals and Health Systems. Low patient volumes have prompted the Bend hospital to close its fifth floor, which it does sometimes depending on its patient volume, Shepard said. Also contributing to worries about revenue is the decline in patients with insurance, Shepard said. In 2009, nearly 7 percent of the organization’s patients had no health insurance, compared with 6 percent in 2008. The hospital provided about
sure that troubled companies, no matter how big or complex, can be liquidated at no cost to taxpayers. It would empower regulators to seize failing companies, break them apart and sell off the assets, potentially wiping out shareholders and creditors to avoid any taxpayer expense.
‘Financial stability oversight council’ To coordinate efforts to identify risks to the financial system, the bill would create a “financial stability oversight council” composed of the Treasury secretary; the chairman of the Federal Reserve; the comptroller of the currency; the director of the new consumer financial protection bureau; the heads of the Securities and Exchange Commission and the Federal Deposit Insurance Corp.; the director of the Federal Housing Finance Agency; and an independent member appointed by the president. The bill would touch virtually every aspect of the financial industry. Hedge funds and most other private equity companies would be required to register
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Wealthy Mexican community finally feels effects of drug war
$60 million in 2009 in uncompensated care, debts unpaid and charity care to those deemed too poor to pay. In 2008, the hospital provided about $50 million. Kramer said that the amount of unreimbursed medical care could continue to be a challenge for both the hospital system and the region. “With the high number of uninsured in Central Oregon,” he said, “there will be a continued high number of charity care or fewer patients who can pay.” St. Charles is not unique in its financial position. Hospitals across the state did poorly in 2008, said Kevin Earls, vice president of the Oregon Association of Hospitals and Health Systems, and began to rebound in 2009. Many hospitals trimmed staff and cut other expenses in 2008, said Earls, so that when patient volume and investment income began to increase in 2009, they were positioned to capture the savings. The $25 million the hospital made in 2009 will help make up for its loss in 2008, said hospital spokeswoman Janette Sherman, and will be used to add to the organizations’s store of cash reserves, a critical measure of the financial health of a hospital. That measure, known as days cash on hand, is used by analysts to determine a hospital’s creditworthiness. At the end of 2008, St. Charles had 104 days cash on hand; it now has 134. Shepard said she would like it to reach 169 days cash on hand, the benchmark that may allow the organization to get a better credit rating. Despite the rosy financial picture from 2009, Shepard sounded a cautious note about the future, noting that volumes still have not rebounded, and the number of patients unable to pay is up in 2010 from 2009. “I think the organization as a whole needs to stay focused and disciplined,” she said, “making sure that expenses track with our revenue.”
By Tracy Wilkinson McClatchy-Tribune News Service
MONTERREY, Mexico — With its superhighways, gleaming skyscrapers, fancy art museums and leafy plazas, Monterrey has always been safe — so safe, in fact, that drug lords chose to park their families here. Life in Monterrey represented another Mexico, cozily above the national fray of violence and disintegration. No scruffy border city or remote, drug-infested outpost, Monterrey is Mexico’s wealthiest city, its economic engine, the center of textile, food-processing, beer and construction industries — a modern, sophisticated metropolis where per-capita GDP is twice the national average. Now, however, as drug-trafficking syndicates expand their reach across Mexico, they have brought even Monterrey to its knees. And as authorities lose control, the business elite are worried, ordinary residents panicked. “The tradition of a tranquil Monterrey has ended,” said Gilberto Marcos, a textile manufacturer who belongs to a citizens
Murder Continued from A1 According to a search warrant filed by detectives on March 11, the mother and son were discovered in a bed, covered by a blanket. The family’s dog and two cats were also in the bedroom, their throats cut. After the deaths, friends and neighbors of the family said Joachim and Dagmar, who ran several businesses, including a construction company and a La
Betsy Q. Cliff can be reached at 541-383-0375 or at bcliff@bendbulletin.com.
for regulation by the SEC, and the bill would impose a thicket of rules for the trading of derivatives, the complex instruments at the center of the 2008 crisis. With limited exceptions, derivatives would have to be traded on a public exchange and cleared through a third party. Buyers and sellers of derivatives contracts, including existing contracts, would be required to post collateral to protect against potential default, a provision
criticized by Warren Buffet. And, under a provision written by Sen. Blanche Lincoln, DArk., some of the biggest banks would be forced to spin off their trading in swaps, the most lucrative part of the derivatives business, into separate subsidiaries, or be denied access to the Fed’s emergency lending window. The banks are strongly opposed to that provision, and the administration has also said that it sees no benefit in forcing the banks to give up swaps.
“If Monterrey is lost, everything is lost.” — Gilberto Marcos, textile manufacturer board that advises the state on security issues. “And if Monterrey is lost, everything is lost.” Monterrey is perhaps paying the price for tolerating the presence of traffickers for so many years, allowing them to fester and grow amid the shared wealth. “For two decades, our deliberate ignorance and our indolence have made us de facto collaborators” with organized crime, said Father Rogelio Narvaez, head priest in the struggling Our Lady of the Rosary parish. “Legality and the social fabric are in crisis. ... It is easier to get guns than a scholarship.” In the space of a few weeks in recent months, drug gangs repeatedly blocked off city streets, snarling traffic and preventing police and soldiers from patrolling. Regular gun battles in and
Pine coin laundry, had been under financial stress. The couple had problems renewing their visas and worried they’d have to return to their home country of Germany. In the months before the murders, the couple began selling their belongings and put their house on the market. In one of the letters left at the scene, Joachim Steffan wrote that he “didn’t want to start over.” Mills said investigators met with some of the Steffans’ family members who traveled from Ger-
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around Monterrey had claimed 164 lives this year as of May 7, almost the same number as in the two previous years combined. The dead included two popular engineering students caught, apparently, in crossfire at the gates of their prestigious university. Business leaders say extortion and forced payment of “protection money” to gangsters are now routine. U.S. universities have canceled exchange programs with Monterrey institutions. Foreign investment fell by 50 percent last year; unemployment has risen sharply. And so, as in so many other parts of Mexico, the citizens of Monterrey are changing the way they live. They don’t go out at night as much. The frequent shopping trips to McAllen, Texas, have been curtailed; they drive the now-dangerous highway only at certain highnoon hours. They look over their shoulders, viewing one another with suspicion. “Our way of being has changed,” said Marcos, the textile manufacturer. “We saw this from afar, and now the problem is catching up to us.”
many after the deaths. He said it was difficult to tell the family that some questions may never be answered — and frustrating for officials who want to figure out if something could have been done to prevent the situation. “It’s not just the police end,” he said. “We want to be able to help get the resources out there so they can better help the people in need.” Erin Golden can be reached at 541-617-7837 or at egolden@bendbulletin.com.
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