PORT ANGELES — The good news for Olympic Medical Center: the public hospital district projects itself to be in the black next year.
The bad news: that projection doesn’t include more than $3 million in cuts that Gov. Chris Gregoire has proposed.
A preliminary budget presented to commissioners Wednesday shows OMC hitting a 1 percent net margin with $142.7 million in operating revenue and $142 million in operating expenses.
OMC officials said they need to maintain at least a 3 percent margin to pay down the $20.7 million debt and invest in capital to survive over the long term.
The draft budget does not reflect Gregoire’s proposal to cut Basic Health, which provides medical services for the poor, and to slash Disability Lifeline, which serves low-income adults and drug and alcohol abuse programs.
The governor proposed $2 billion in statewide cuts last week to balance the budget.
Special session
Her proposal will be considered by the state Legislature in a special session beginning Nov. 28.
OMC Chief Executive Officer Eric Lewis has said thousands of Clallam County residents would lose their health insurance if the plan is approved by the Legislature.
“I think the big uncertainty is the state budget cuts,” Lewis told commissioners Wednesday. “We have not reflected those cuts that were proposed by the governor. If we did, revenues would go down by $3 million, and I think that’s a key point to keep in mind.”
OMC’s budget is a work in progress because of looming state and federal cuts.
Changes ahead
“We’re going to have to make further changes to the 2012 (budget) depending on what happens in Medicare and Medicaid reimbursement because those things are real moving targets,” Lewis said.
“They could move around by millions of dollars.”
The seven commissioners will consider adopting a budget at their next meeting Nov. 16.
“This was the most difficult budget I’ve worked on because of all the unknowns out there, and not knowing what to put in and what not to put in,” Chief Financial Officer Julie Rukstad said.
OMC is projecting a 3.5 percent increase in inpatient volume next year, led by a 35 percent spike from its new orthopedic clinic in Sequim.
Uncompensated care, which will cost OMC
$9.6 million this year, is projected to rise to
$11.1 million in 2012.
Property tax increase
Commissioners will consider approving 1 percent increase to the property tax levy.
Such an increase would generate an additional $37,050 and bring the total revenue to $3.7 million.
In the public comment portion of the budget hearing, several speakers addressed OMC’s ongoing labor negotiations with Service Employees International Union 1199 Northwest.
Four speakers expressed support for the 350 union-represented registered nurses, dietary and service workers who are locked in a one-year dispute with management over health care benefits and staffing levels.
OMC updated its three-year strategic plan to reflect its new affiliation with Swedish Medical Center.
A goal was added to “leverage our affiliation with Swedish Health Network to expand local services and have a high quality, seamless place to refer patients for services we do not perform locally.”
Another goal was added to pursue the purchase and installation of Epic electronic medical records. Federal financial incentives for “meaningful use” of digital records take effect in July 2013.
Joins VHA
In board action, commissioners authorized the hospital to join Swedish’s buying group, VHA.
VHA is a partner with Providence Health Systems and several other hospitals.
“I think that buying group offers us great long-term potential to get the best possible price,” Lewis said.
OMC currently gets its medical supplies from Amerinet. The change will not take effect immediately.
At the end of the meeting, Commissioner John Beitzel reported he and other board members met with 24th District state Sen. Jim Hargrove, D-Hoquiam, and state Reps. Kevin Van De Wege and Steve Tharinger — both Sequim Democrats— last week.
“They were talking about a cuts-only budget,” Beitzel said. “Nothing was optimistic. It was gloom and doom.”
Board Chairman Jim Cammack urged citizens to contact their elected officials and encourage them to support OMC through the legislative advocacy link at www.olympicmedical.org.
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Reporter Rob Ollikainen can be reached at 360-417-3537 or at rob.ollikainen@peninsuladailynews.com.
