Murmurs: Fallout Spreads From Rockwood Tower

FALLOUT SPREADS FROM ROCKWOOD TOWER: Multnomah County is struggling to replace shelter space lost when accounting discrepancies prompted it to stop paying rent for homeless families at Rockwood Tower, an old Best Western in Gresham that became a family shelter thanks to a $6.8 million grant of state taxpayer money. The county had planned to fill the gap with another hotel conversion, sending families to a 50-room Days Inn & Suites on Southeast Stark Street, but the property owner is facing “unforeseen financing challenges,” according to an email sent to city managers by County Commissioner Vince Jones-Dixon on March 11. “Although we cannot provide the family shelter units on the original schedule, we are focused on finding a location that minimizes service delays and keeps these vital family units,” Jones-Dixon wrote. The county faces a shelter crunch because it stopped doing business with East County Housing LLC, alleging the contractor had sought reimbursement for unapproved expenses and double-counted costs. East County Housing is one of several related nonprofits founded by Brad Ketch, a former tech executive who turned to social services. Ketch became a player in the shelter business in 2021, when the Oregon Community Foundation granted him $6.8 million in state funds to buy the Best Western and turn it into housing. Last year, East County Housing used the building as collateral for $3.4 million in loans from Seattle-based WaFD Bank. Ketch planned to use some of the money to build a 56-unit apartment building in Gresham, but withdrew plans in January, the same month that WaFD foreclosed on the loans citing “financial strain” put on East County Housing when it lost its shelter contract with Multnomah County. JFP Partners, the firm in charge of managing Rockwood Tower during the foreclosure, is helping residents find new housing and will sell the building in the near future, JFP owner Joe Fanelli said in an email to WW. Any new owner must use it for housing or return the $6.8 million to taxpayers, according to the Oregon Community Foundation.

HEALTH INSURANCE CLEANUP CONTINUES: One of Oregon’s largest health insurance plans announced in recent days it might be going up for sale but, in the meantime, it still has quite a bit of cleaning up to do. In a recent letter, state officials told the Providence Health Plan that the insurer had fallen out of compliance with a contract to manage health insurance for tens of thousands of public employees and their families. These customers, who are insured through the Public Employees’ Benefit Board, or PEBB, are a major subset of Oregon Providence members who have reported maddening, confusing and at times scary bureaucratic hangups with their health care after the Providence Health Plan on Jan. 1 outsourced administrative work on some of its health insurance plans to a Silicon Valley firm called Collective Health (“Technical Hiccups,” WW, March 11). In an email, a Collective Health spokesperson acknowledged the transition was “initially more challenging than expected” but said the company continues to improve the quality of its services, and that PEBB remains a valued client. But some remain unsatisfied. At a recent meeting, after a rundown of some of the health care dramas documented in public comments—one man said Collective Health’s bureaucracy threatened to delay for weeks chemotherapy for his terminal cancer—PEBB director Ali Hassoun said he wanted to talk about accountability. The benefits board, Hassoun said, had filed notice with Providence that the insurer was out of compliance; he said board staff were continuing to work with Providence to resolve the matter, and that he would have updates soon. Notably, the same day as that meeting, Providence informed PEBB it would drop plans to bid for a new contract with the board in 2027, an Oregon Health Authority spokesperson tells WW. Two days later, on March 19, Providence announced it might sell its whole health insurance business altogether.

HOME FORWARD BRIEFS BOARD ON DECLINE: Home Forward, the city’s housing authority, divulged more information last week about its high vacancy rates, tenants’ nonpayment of rent, and cash flow woes to its board of commissioners. As WW has reported, Home Forward, which operates 7,000 units of affordable housing across the city, is in dire straits. Its buildings are inching closer to financial distress. Tenants across its buildings complain of rampant drug dealing inside their walls and outsiders getting unfettered access to buildings. And a vacancy rate of 14% in November (11.7% more recently, according to the agency) means that more than 900 units of affordable housing sit unoccupied. At the Home Forward board of commissioners meeting March 17, top agency officials explained how matters had come to such a bad place: fewer tenants paying rent on time, competition with market rate apartments for tenants, more clients with more acute needs, and soaring operating costs. Those headwinds largely match what WW has reported. According to a review of board meeting minutes, this was the first detailed briefing the board had received in months, and it comes as pressure from elected officials ramps up on Home Forward.

UP, UP, WITH MEDICAL COSTS: Health care prices have been spiraling skyward in recent years, but like many a hospital system, Portland-based Legacy Health says it’s got to raise them even more. Health insurer Regence BlueCross BlueShield, for example, says two years after a contract dispute over the exact same issue that Legacy is asking it to help pay for a pay bump of 22% at its hospitals and clinics over the next two years. Legacy attributes the request to a massive 47% rise in its own costs since 2021, owing to inflation, higher supply costs, and a health care workforce shortage. “We rely on our partners, like Regence, to carry their fair share of those increases,” a spokesperson says. Regence, however, is balking—prompting what has become a very common public rhetorical showdown in which legions of everyday people get notices informing them they might face bigger out-of-network bills if an accord is not reached soon. A Regence spokesperson says the insurer spends nearly 90 cents of every premium dollar directly on members’ health care, which “means if Regence agreed to Legacy’s ask, it’d directly increase health care costs for local businesses and consumers who receive care at Legacy facilities by 22%.” The deadline here is March 31, at which point some Legacy services will cost more for the Portland area’s many Regence members, even as negotiations drag on. Regence, meanwhile, continues to wage a separate contract battle with Oregon Health & Science University, whose own inflationary demands, the insurer notes, could lead to “double-digit” price increases for consumers.