PORT ANGELES — Olympic Medical Center’s net revenue was $1 million under budget last quarter and $2.3 million under budget for the year.
The North Olympic Peninsula’s largest public employer had a 2.1 percent total margin last quarter, about half of the 4 percent OMC needs to create capital to pay for new equipment.
Chief Executive Officer Eric Lewis on Wednesday said this recession is affecting health care in ways that past recessions did not.
“You used to say recessions didn’t affect health care too much, and I think in some of the earlier recessions we had in like ’91 and 2001, health care wasn’t as affected,” Lewis said.
“But I think this is a much deeper recession. Both Medicare and Medicaid are cutting back on what they can pay us — private sector insurance and individuals — it’s a serious economic situation we’re in.”
Below last September
OMC total margin has been below 2.3 percent since last September.
The key indicator of the nonprofit’s financial health was in the double digits in 2000 and 2001 before falling below 4 percent in 2005.
Operating revenue, at $31.2 million last quarter, was $2.5 million under budget at OMC. Driving that trend was a $5.6 million shortfall in outpatient revenue.
Lewis said many uninsured patients are waiting until they become very sick to access health care.
“That’s not a good situation for our delivery system,” Lewis said.
Even with expenses down 2 percent last quarter, the hospital district’s net revenue last quarter was $649,000, compared to a budgeted $1.7 million.
For the year, an $8.5 million drop in outpatient revenue drove net revenue $2.3 million under budget to $1.1 million.
Julie Rukstad, chief financial officer, told the OMC commissioners on Wednesday that CT scans, home health visits and radiation procedures were up last quarter.
But short stay visits, surgeries, emergency room visits, endoscopies and cardiac, lab and rehab procedures were down, she said.
“We’re facing lower volumes,” Lewis said.
More uninsured
“It’s more people being uninsured. It’s also people having $3,000 deductibles and not having the money to use health care.”
Outside competition for profitable services like cardiac care is adding to the problem, Lewis said.
“We’re challenged in a lot of areas but the economy is very much affecting this,” he said.
Amid its financial struggles, the public hospital district has not resorted to layoffs.
“We need to manage through the recession,” Lewis said.
“We want to keep our work force because they are great employees and we do a great job. We’re going to try to continue to try to focus on providing more services locally and being as efficient as we can.”
OMC has more than 1,000 employees.
MRI machine
The commissioners on Aug. 18 expect to award a bid for the installation of a new MRI machine at the Port Angeles hospital. The not-to-exceed cost is $400,000.
The board opened the public bidding process on Wednesday at their twice-monthly business meeting in Linkletter Hall in the basement of the Port Angeles hospital.
OMC is also negotiating for the purchase of a linear accelerator, which will be used for radiation treatment at the Sequim Cancer Center.
“This is a major purchase in the $2-million-plus range,” Lewis said.
By a unanimous vote, the seven-member board also passed a resolution supporting the propsoed North Olympic Library System levy lid lift, which will be on the Aug. 17 primary election ballot.
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Reporter Rob Ollikainen can be reached at 360-417-3537 or at rob.ollikainen@peninsuladailynews.com.
