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OHSU board of directors gets financial update

COVID-19 pandemic continues to put a strain on financial performance
OHSU Hospital (OHSU) in spring.
OHSU leaders outlined a series of goals to reverse the operating loss of $64 million that was reported as of the end of March, for the fiscal year that began in July 2021. (OHSU)

The COVID-19 pandemic continues to put a strain on Oregon Health & Science University’s financial results, the university’s board of directors heard during its quarterly meeting Friday.

A surge of hospitalizations in the past year — first from the delta variant of the SARS-CoV-2 virus, and later the omicron variant — has limited surgeries and other procedures while increasing contract labor and overtime and incentive payments to cover shifts in Oregon’s largest hospital.

OHSU leaders outlined a series of goals to reverse the operating loss of $64 million that was reported as of the end of March, for the fiscal year that began in July 2021.

Lawrence J. Furnstahl standing outside near trees.
Lawrence Furnstahl (OHSU)

“OHSU financial results have continued to decline, with the impact of omicron combined with longer-term staffing challenges,” reported Lawrence Furnstahl, OHSU chief financial officer. “We assume with ‘endemic COVID’ that this year’s negative impact on clinical volume and hospital staffing costs will lessen next year.”

The largest single factor in the current budget shortfall is $49 million in higher contract labor costs, including traveling nurses, Furnstahl reported. OHSU is working to hire permanent staff to replace these contract positions, recognizing the critical importance of a sustained investment in the people who carry out OHSU’s missions year after year.

Danny Jacobs, M.D., M.P.H., FACS (OHSU) next to a wall atop stairs.
Danny Jacobs, M.D., M.P.H., FACS (OHSU)

OHSU President Danny Jacobs, M.D., M.P.H., FACS, said university leaders are working to formulate a response that sustains OHSU’s core missions in health care, research and education over the long term.

“This work will focus on managing our growth more sustainably, not on short-term cost-cutting measures,” Jacobs said. “Our priority has always been and will continue to be people, and we remain steadfast in taking a people-first approach to these challenges. We will not compromise our active work to better our organizational culture, and we will persist in doing what we do exceptionally well — including providing complex care for the sickest of the sick; and ensuring health care access for the state’s most vulnerable, underserved residents.”

The university manages an annual operating budget of almost $4 billion, adopted in June of last year.

The meeting was held in person for the first time since the beginning of the COVID pandemic at the Robertson Life Sciences Building.

Other highlights:

  • The board heard an update on the work of oversight and implementation committees related to the investigation and recommendations made in December by the law firm Covington & Burling LLP to change OHSU’s institutional culture to eliminate inequitable treatment, discrimination, harassment and bullying.
  • The board heard an update on the status of the OHSU 2025 strategic plan.
  • Brian Druker, M.D., director of the OHSU Knight Cancer Institute, delivered an update on the institute’s progress and its role in reinvigorating President Joe Biden’s Cancer Moonshot initiative.
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