State eyes 26 percent annual jump in patient costs at St. Charles
Published 6:30 am Thursday, November 20, 2025
The cost of care at St. Charles Health System in 2023 was 26.3% higher than in the year prior, according to an analysis by the Oregon Health Authority.
St. Charles Health System, which operates the region’s only hospitals along with 30 primary and speciality care clinics, said it has its reasons that cost spiked well over the state’s target of 3.4%. Yet the Oregon Health Authority found several of those reasons were not valid.
The health system is asking state health officials to reconsider its decision, said Alandra Johnson, St. Charles Health System spokeswoman.
“We continue to work on cost containment as our patients work hard to live within their own budgets in these difficult times,” Johnson said.
St. Charles attributed the rising costs to patients staying longer in the hospital after the COVID-19 pandemic, capital investments, higher front line worker salaries, changes in behavioral health as well as retail and medical pharmacy spending.
The Oregon Health Authority determined that COVID-19 surges resulting in longer stays and capital investments did not warrant higher costs. But higher frontline worker salaries, pharmacy spending and changes in behavioral health directives, were valid reasons, according to the health authority.
“St. Charles appreciates the Oregon Health Authority’s role in overseeing important policy objectives such as cost growth containment in health care for Oregonians,” said Johnson. “It takes OHA’s input seriously and strives in good faith to meet the agency’s requirements.”
The Oregon Health Authority on Monday placed St. Charles and four other health care organizations on notice that their reasons for increased costs were not acceptable. The others were:
ModaHealth’s Medicare Advantage insurance plans, which increased 15.4%;
Corvallis Clinic, which increased 8.7%, for commercially insured patients;
PacificSource’s commercial plans increased 7.3%;
United Healthcare’s Medicare Advantage insurance plans increased 6.3%.
Three of those five health care organizations —St. Charles,United Healthcare and PacificSource — are required to submit to an improvement plan with periodic review, according to the law. The health organizations will be required to address cost drivers and provide a timeline showing how it will reduce cost growth. The plans are due by the end of January.
The law was designed to provide transparency and limit cost increases to no more than 3.4% annually. The average growth among health care providers accepting Medicaid was 4.5%, but those justifications were considered reasonable in a time of increased inflation, according to the health authority.
The Hospital Association of Oregon, which supports hospitals, worked with lawmakers to create the cost growth program to address the challenge of rising health care costs, said Becky Hultberg, president and CEO of the association.
“However, hospitals continue to have serious concerns about the program,” Hultberg said. “The foundation beneath hospitals continues to shift as payments from Medicaid and Medicare don’t keep pace with the cost of providing care and state laws — and the Oregon Health Authority’s implementation of them — create an onerous operating environment.”
That has made it harder for patients, too.
Across the board, wages have not been keeping up with rising health care costs in Oregon and nationwide, straining budgets for families that may have to make cuts to meet their financial obligations, according to the health authority.
“The Oregon Health Authority tracks and evaluates health care spending to shine a light on high health care costs, which cause too many to make the impossible choice of either paying for prescriptions or groceries,”said Sarah Bartelmann, health authority sustainable health care cost growth target program manager. “Everyone needs to work together on this critical issue.”