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Statement regarding OHSU’s financial performance 

Danny Jacobs M.D. M.P.H. FACS (OHSU) atop stairs at OHSU.
OHSU President Danny Jacobs, his executive leadership team, along with senior leaders from across the organization, are developing a new strategic and disciplined fiscal approach for the coming five years. (OHSU)

 

“I am extremely grateful for everything all of our members have done, and continue to do, to help support OHSU and the people of Oregon. After more than two years of managing through a global pandemic and other severe challenges, OHSU is no stranger to uncertainty. We have demonstrated an ability to pivot, reinvent and repurpose countless times to support our people and our missions. Together, as one university, we are taking actions -- deeply rooted in our missions and values, and our responsibility to the state -- to improve our financial performance and ensure OHSU’s long-term future.” -- OHSU President Danny Jacobs, M.D., M.P.H., FACS 

Background  
The pandemic has exacerbated OHSU’s financial challenges. While patient volumes have increased, admissions, patient throughput and the type of patients we care for have changed, which has decreased our revenue. At the same time, costs, especially labor costs, are higher than ever.

Prior to the pandemic, OHSU’s revenue growth covered budget gaps and enabled investment in our people, programs and places, in support of our statewide education, research, patient care and community service missions. But postponing surgeries and procedures to care for multiple surges of patients severely ill with COVID-19, a prolonged workforce shortage that requires us to close hospital beds for periods of time, widening inflation, and increasing uncertainty all have contributed to a financial situation in which our expenses are outpacing our revenue at an alarming rate.  

In February 2022, OHSU experienced a loss of $20 million, bringing the year-to-date operating loss to $61 million, which is $69 million below the seasonally adjusted budget and $102 million worse than the first eight months of last year (FY21).  

To overcome these obstacles and ensure OHSU’s long-term future, OHSU President Danny Jacobs, his executive leadership team, along with senior leaders from across the organization, are developing a new strategic and disciplined fiscal approach for the coming five years that will create a more sustainable and certain future for years to come.  

Some of the short-term fiscal measures we have used over the years – such as hiring freezes and reductions in service and supply expenses – will not serve the long-term strategic interest of OHSU, and we would like to take a different approach.

Organizational prioritizes that will endure include are our timeless aspirations*; our active work to become a better organization where all are welcomed, are supported and can be successful; doing what we do exceptionally well -- providing complex care for the sickest of the sick; and, ensuring health care access for the state’s most vulnerable, underserved residents. 

All missions – patient care, education and research – will be impacted, although to varying extents.   

OHSU is one of hundreds of hospitals and health systems nationwide to experience financial hardship in 2022. According to a recent report cited by the American Hospital Association, “hospitals’ and health systems’ median operating margins declined by 11.8% in February [2022] and 26.7% year over year.”  

To help explain the current situation, we have created a whiteboard video.

*OHSU’s timeless aspiration 

  • Building a diverse, equitable environment where all can thrive and excel. 
  • Being the destination for transformational learning. 
  • Enhancing health and health care in every community. 
  • Discovering and innovating to advance science and optimize health worldwide. 
  • Building community partnerships for a better world. 
  • Ensuring a sustainable foundational infrastructure.
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