OMC financial woes continue
Olympic Medical Center commissioners were reminded of the organization’s persistent financial challenges related to revenue loss, stagnant patient volumes and low government medical reimbursement rates this week.
Wednesday evening’s commissioner meeting was conducted virtually only out of caution due to concerns about a local resurgence of COVID-19.
Chief Financial Officer Lorraine Cannon reported OMC lost $3.554 million in July. Most of the losses were due from a shortfall in anticipated patient revenue: OMC had budgeted for $22 million in patient revenue but only realized $17.611 million,she said.
A primary factor in the decline in revenue, Cannon said, was a steady decrease in the number of patients using commercial insurance, which reimbursed OMC at higher rates than government programs like Medicare and Medicaid.
Compounding the loss were expenses related to a long-term, at-risk patient who was discharged, but whose charity care cost OMC $750,000, Cannon said.
OMC commissioners learned the hospital had received an unrestricted $458,000 distressed hospital grant from the Washington Health Care Authority that it can spend any way it chose, Cannon said.
To qualify for the grant, a hospital had to demonstrate it either lacked adequate cash on hand to remain financially solvent, had experienced financial losses during fiscal 2022 or was at risk of bankruptcy, according to Washington State Hospital Association.
OMC had operating losses of $16.1 million in 2022 at the height of the COVID-19 pandemic and $7.9 million in losses for the first four months of 2023.
Cannon thanked OMC staff for pulling together all of the information needed to apply for the grant.
“We figured out how to do it along with doing our financial audit, along with doing all the other things we had to do,” Cannon said. “This was a good 20 hours worth of work to get this all done. They worked really hard on it.”
Chief Executive Officer Darryl Wolfe said measures OMC had taken to cut expenses were making an impact. These have included reducing overtime, reducing contract labor, suspending non-essential travel, a hiring freeze on non-clinical staff positions and suspending purchases of office supplies.
“In February, we had a daily burn rate of $750,000 per day, give or take a little bit, and in July it was $672,000, so the measures that we put in place are affecting our daily burn rate,” Wolfe said.
“I see that as some success, it’s not where we want to be and we’re not done. But the actions that we’ve taken in the last several months are helping us and I think that’s worth it.”
The burn rate is a measure related to how fast a company spends its available supply of cash.
While OMC can continue to implementing internal cost-saving changes, Wolfe said, the problem of low Medicare and Medicaid reimbursement rates could be solved only at the federal level. About 62 percent of OMC patients are enrolled in Medicaid, and the number of those covered under private insurance, whose reimbursement rates are considerably higher, is steadily declining.
Wolfe said hospital personnel had reached out to Washington’s senators — Sen. Patty Murray, D-Seattle, and Sen. Maria Cantwell, D-Mountlake Terrace — and Congressman Derek Kimer, D- Gig Harbor, who represents the 6th Congressional District, which includes the North Olympic Peninsula — alerting them to OMC’s situation and requesting their assistance.
“The good thing is we have going for us is Sen. Murray, Sen. Cantwell and Derek Kilmer care about this place and they know who we are,” Wolfe said. “So, I think we have credibility.”
Open positions
Human Resources Director Heather Delplain reported that OMC had 229 total open positions in July. Included in that number were 33 provider positions, 45 registered nurse positions, nine certified nursing assistants and five medical assistant positions.
Money and housing were the two primary reasons OMC struggled to hire and recruit new employees amid a nationwide healthcare worker shortage, she said.
“Some other hospitals are able to offer higher incentives for coming on board, for example,” she said.
“Some can offer student loan repayment options and other incentives that financially would be challenging for us to implement. We’ve had people tell us ‘ I couldn’t find a home here,’ so they’ve turned down the position.”
Nonetheless, Delplain, said, progress has been made in the compensation OMC offered.
”I don’t want to give the impression that we’re underpaying,” she said. “But it’s difficult to compete with some of the other hospitals.”
Scholarships
Bruce Skinner, executive director of the Olympic Medical Center Foundation, said it had already received inquiries about its Healthcare Scholarship Fund that will provide $500,000 in financial support divided between OMC employees who want to further their education and individuals enrolled in Peninsula College’s medical programs. Scholarships will be awarded from Sept. 1, 2023 through Aug. 31, 2024.
“Once we start receiving applications, we’ll have a committee that will consist of our board members, with exoofficio participation and input from Vickie (Vickie Swanson, OMC Chief Nursing Officer) and other hospital employees,” Skinner said.
Skinner said funding also would be available for low-income students for cost-of living expenses.
“A lot of people who have good jobs, they go back to school all of a sudden can’t work anymore, so they fall into the lower income category or they come from that already,” Skinner said. “So we’re planning to help them even more.”
By: Paula Hunt
Source: Peninsula Daily News