Oregon Health & Science University faces a challenge in balancing the budget before the end of the fiscal year, even as patient demand has never been greater, the academic health center’s board of directors heard Friday, April 19, during a regular public meeting.
Through the end of March, OHSU recorded an operating loss of $44 million on a $4.9 billion annual budget. Expenses have been driven higher by inflation and investments in wages, including new contracts with labor unions and Oregon’s new hospital staffing law.
University leaders are conducting a comprehensive audit to assess all current expenses, projects and roles with a goal of balancing revenues and expenses by the end of OHSU’s fiscal year June 30. The largest driver of increased operating income loss in March was a sharp decline in highly specialized services, highlighting the importance of the realignment effort focused on improving access to that complex care at OHSU — in some cases the only health system in the region to provide it.
At the same time, OHSU’s research program generated a raft of new discoveries advancing human health powered by a record of nearly $600 million in research funding last year, while the university continues to educate the next generation of health care professionals.
“Like academic health centers across the country, OHSU continues to navigate an evolving health care landscape that is more challenging than ever,” Chief Financial Officer Lawrence Furnstahl wrote in a memo to the board. “Even though OHSU has fared better financially than many other health systems — thanks in large part to focused work on the part of our members — expenses continue to outpace revenue growth, putting us at financial risk.”
Leaders are focused on making sure Oregonians retain access to the kind of complex specialty care delivered only at the state’s academic health center, getting patients the services they need without having to travel outside the region.
“Our strategies will focus on our core, state-mandated missions, including improving access to the complex specialty and subspecialty services that no other health system in the region can provide,” Furnstahl wrote.
Indeed, over the past five years OHSU’s hospital net patient revenue has grown by 58% — twice the rate of all other Oregon hospitals. To meet growing demand, a hospital expansion project now underway will add 128 patient beds to what is already Oregon’s single largest hospital when it opens in 2026.
In the meantime, patient demand routinely exceeds the 576 licensed beds in OHSU Hospital and OHSU Doernbecher Children’s Hospital.
“Patients who need OHSU care often sit in other hospitals for days (and occasionally weeks) awaiting a bed at OHSU,” according to a memo by John Hunter, M.D., chief executive officer of OHSU Health, Nathan Selden, M.D., Ph.D., interim dean of the OHSU School of Medicine, and Brooke Baldwin, Ph.D., RN, chief nurse executive. “Not only is this process extraordinarily trying on the patient and their family, it causes distress in our providers, many of whom have trained for years to provide the ultra-focused specialty care needed by that patient.”
To rectify this problem, OHSU Health leaders outlined a strategy to shift inpatient bed capacity toward the complex care that is uniquely provided at OHSU:
- Reduce admissions through the emergency department through virtual visits, better use of urgent care and shifting some patients to partner hospitals Adventist Health Portland and Hillsboro Medical Center.
- Reduce the average length of stay for patients hospitalized at OHSU through care management strategies and in working with a state task force to increase the availability of space in skilled nursing facilities outside of OHSU.
- Allocate beds to service lines associated with specialty care that OHSU uniquely provides in Oregon, including patients in need of care for cancer, neurological conditions, cardiac and complex surgeries. Currently, OHSU is unable to accommodate a quarter of the requests made by community hospitals across the region seeking to transfer patients to OHSU for high-level care.