PORT ANGELES — The second-highest authority at the Centers for Medicare & Medicaid Services will be visiting Olympic Medical Center in November, spokesperson Bobby Beeman confirmed via email Wednesday.
Jonathan Blum has a dual role as the principal deputy administrator and chief operating officer at CMS and serves directly under Administrator Chiquita Brooks-LaSure. CMS is the agency within the U.S. Department of Health and Human Services that administers Medicare, Medicaid, the Children’s Health Insurance Program and the Health Insurance Marketplace.
He will visit on Nov. 14, Beeman said.
OMC has said about 84 percent of its patient revenue comes from government programs whose reimbursement rates do not cover the cost of care. Medicare, for example, reimburses at about 80 cents on the dollar, and Medicaid reimburses at only 42 percent of hospital costs.
At the same time, the number of patients with private or commercial insurance, which pays at far higher levels, is shrinking, from about 19 percent a few years ago to about 14 percent today.
Chief Executive Officer Darryl Wolfe has said that this uneven payer mix is a primary driver of OMC’s financial problems.
OMC is not alone in contending with underpayment.
Along with hospitals across the state, it also is experiencing unprecedented operating losses as expenses outpace revenues, facing challenges discharging patients and staffing shortages that continue to persist after the end of the COVID-19 pandemic.
The good news is that OMC isn’t looking at bankruptcy or closure like some rural health systems.
“Things are getting better, but they’re not that great,” Wolfe told OMC commissioners at their meeting held online on Oct. 18.
“Washington hospitals across the state lost $746 million in operations in the first six months (of the year),” he said. “That’s better than the $1.1 billion last year, but it’s still a big deal and not what we want to see, but it is the reality that we’re dealing with.”
Achieving financial viability and stability remain a top priority for OMC, but addressing workplace safety also must be a critical element in the hospital’s future, Wolfe said.
OMC registered a net operating loss of $905,000 in September, Chief Financial Officer Lorraine Cannon said, despite a $458,000 distressed hospital grant from the Washington Health Care Authority and a decrease in the number of travelers — staff and providers on contract who cost more than permanent employees.
It lost $890,000 in August and $5.3 million in the third quarter. It has lost $19.261 million so far this year.
Cannon said that, contrary to appearances, OMC is actually headed in the right direction. She pointed out it had been lowering its negative profit margin over each of the last four quarters.
“I want to emphasize that it’s an upward trend,” Cannon said. “We’re working hard on this, and we’re certainly not done with everything we’re doing.”
Commissioner Philip Giuntoli said he remains concerned about OMC’s stagnant revenue.
“We’ve done a phenomenal job in reducing our expenses and reducing the burn rate, but we can’t get there if we lose ‘only’ $900,000 a month, that’s almost $11 million a year,” Giuntoli said.
Wolfe said OMC anticipates a bump in government program reimbursement rates that would mean about $10 million in additional revenue in 2024.
Revenue continues to chase after expenses at OMC because a growing percentage of its patients are being covered by government programs that pay less than what it costs to provide services.
OMC’s gross revenue to date this year was $391 million — ahead of where it was this time last year when the amount was $375 million. However, its net revenue to date of $174.2 million was less than it was in 2022 ($184.2 million).
Compounding the financial pressure on OMC is an increasing number of patients ready to be discharged who are stuck in the hospital for a variety of reasons — such as a lack of beds at acute- or long-term care facilities or waiting for state-appointed guardians.
Part of OMC’s turnaround plan, Wolfe said, is continuing to look internally at what it could do to improve revenue by considering strategies for enhancing its market share and making its coding and billing practices more efficient.
“Another task that we are working on and putting a lot of energy into is trying to figure out ways to build our capabilities in-house so that more inpatients can receive care here instead of transferring, as hospitals across the state have become more and more full at any given time,” he said.
On Oct. 9-10, OMC received a visit from the hospital accreditation organization DNV in response to safety incidents the hospital had reported.
“It’s starting the culture that we want, which is we want this to be the safest places for patients and staff,” Wolfe said. “So we’re reporting promptly, quickly, and they’re responding and telling us what we need to do.”
Those actions could mean less public access to some areas of the hospital and enhanced security, such as panic buttons, for staff.
“We really need to rethink our security posture,” Wolfe said.
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Reporter Paula Hunt can be reached at paula.hunt@peninsuladailynews.com.
