PORT ANGELES — Olympic Medical Center, like hospitals across the state and country, is facing intense financial pressure that is threatening its solvency and long-term sustainability.
Candidates Ann Henninger and Gerald Stephanz, who are vying for the Position 1 seat on the seven-member Hospital District 2 board, debated Tuesday at a Port Angeles Business Association meeting over how the hospital had reached its current state and what steps are needed to secure its future.
Their discussion focused on financial stability, transparency and quality of care, with the candidates offering different perspectives on the hospital’s challenges, potential solutions and the board’s role in overseeing the organization.
Henninger, who was elected in 2019, is the board’s president and also serves on the board of the Washington State Hospital Association. As a registered nurse who has lived on the Peninsula for 29 years, she said she brings a clinical nursing perspective as well as a patient-focused viewpoint to the board.
Stephanz is a retired medical doctor who moved to the area in 2015 after working at large and rural hospitals, primarily in Utah. For the past 10 years, he has volunteered as a physician, medical director and board member at the Olympic Peninsula Community Clinic. In 2023, he received the 2023 Port Angeles Chamber of Commerce Community Award for citizen of the year.
“We need people on the hospital board who understand the business of medicine at a hospital,” said Stephanz, who said he has the administrative and advocacy experience the current board lacks.
Expertise and experience are critical to creating a path forward, he said.
“The survival of OMC is the survival of Port Angeles,” he said. “No person or business will move here without a hospital.”
He cited $56 million in losses from 2022 to 2024, along with $1.5 million lost in the first half of 2025, as key indicators of the board’s decision-making shortcomings.
The crisis at OMC, particularly as it relates to inadequate Medicare and Medicaid reimbursements, has been decades in the making, he said.
“In fairness, there are many things that are out of our control,” he said. “But those things did not happen overnight.”
Henninger highlighted the strides OMC has taken over the past two years to close the revenue gap through efforts like cost savings and more efficient billing practices. The government payer problem is not something any hospital can solve, she said, so OMC will continue to pursue ways to boost productivity to increase revenue.
She contested Stephanz’s assertion that the board had not exercised enough oversight of OMC’s executive team of leaders and decision-makers — CEO Darryl Wolfe, CFO Lorraine Cannon and COO Ryan Combs — all of whom left in the past few months.
“The board’s only employee is the CEO, who is responsible for day-to-day operations, and the board is responsible for government oversight,” Henninger said. “We need to stay in our governance lane. We do not get into day-to-day operations. That is not our job.”
Both Henninger and Stephanz emphasized their commitment to the hospital’s mission of providing accessible, high-quality care. They agreed that the possibility of cutting back services needs to be considered if OMC is to remain financially viable.
They differed, though, on how that might be approached.
Stephanz said hard choices would need to be made about determining which core services are essential — a good emergency room, primary care, general surgery, pediatrics and orthopedics — and which are “gravy.”
“We need to look hard at what’s making money and what’s losing money, and make decisions with the community about what we need to keep or what needs to go,” he said.
Henninger noted that fiscal responsibility should not come at the expense of patient care.
“Of course we have to look at what’s profitable and what is not, but we also have to look at what are our community’s needs,” she said. “We can’t sacrifice quality for the sake of balancing the budget.”
Stephanz reiterated criticism voiced by the community at OMC board meetings about a lack of board transparency.
From the search for a health system partner to reporting on the recurring survey failures that have threatened the hospital’s Medicare payment status, he said the board needs to share information and be more open to public inquiry.
Henninger pushed back on that claim.
“Nothing about what we do is secretive,” she said. “We are a public entity, and our work, our actions, our activity is done in public. We are in compliance with the Open Public Meetings Act.”
She noted OMC has created a page on its website that provides detailed, up-to-date information on the progress of the potential partnership, and that people can reach out to commissioners at any time.
“What I’ve experienced with our board this year is an increased level of engagement and communication,” she said. “We’re tackling hard subjects with honesty and a little bit more vulnerability than I’ve seen in the last six years.”
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Reporter Paula Hunt can be reached by email at paula.hunt@peninsuladailynews.com.
