PORT ANGELES — Olympic Medical Center struggled this year with declining state and federal funding but is keeping its head above water and finding new ways to bring services to the community, the hospital’s chief executive officer said this week.
Eric Lewis talked to about 100 members of the Port Angeles Regional Chamber of Commerce on Monday.
Funding over the past few years has reduced the public hospital district’s profit margin to just more than 1 percent — the absolute minimum amount that is required to continue paying the medical center’s capital debt and for essential capital investment, Lewis said.
Continued state and federal budget cuts could reduce the hospital’s income by more than $3 million, he said.
OMC commissioners in November approved a $140.9 million budget for 2012 without knowing how deep cuts would be.
The hospital district budgeted for $143.1 million in operating revenue, $140.9 million in expenses and a 2 percent profit margin, but the budget may change in early 2012 after the state Legislature makes $2 billion in cuts to balance the state budget.
Layoffs are not part of next year’s budget for the hospital, which employs more than 1,000 workers.
Medicare, Medicaid
State and federal Medicare and Medicaid reimbursement is less than the expenses of treatment, Lewis said Monday.
“Twenty percent of our budget is Medicare and Medicaid,” he said.
As long as those payments decline, the hospital will continue to lose money on those patients, he said.
“We are at the lowest reimbursed level,” he said.
Lewis said the medical center completed union negotiations with the United Food and Commercial Workers International Union 21, which represents 374 professional tech workers, but talks with Service Employees International Union 1199NW, which represents 375 nurses, certified nurse assistants and cafeteria workers, have stalled.
“We can’t sign agreements we can’t afford,” Lewis said.
However, not all the news was grim.
Upgrades
The hospital has affiliated with Swedish Medical Center of Seattle — an agreement also approved by Jefferson Healthcare hospital commissioners in Port Townsend and under consideration by Forks Community Hospital.
OMC also added new cancer treatment options, continued to recruit doctors for the area, opened a new clinic in Sequim and is planning to expand the emergency room in 2012, Lewis said.
“We’re better able to meet community needs,” he said.
Lewis said the 20-year partnership with Swedish means OMC patients have access to Swedish services and programs, can transfer to Swedish for necessary care, and OMC lowers its costs by signing on to the Swedish group buying plan.
From computer programs to medication, Swedish buys supplies and services in much greater quantities than OMC, resulting in lower prices, Lewis said.
“That can save millions,” he said.
Since 2009, OMC has brought 25 new physicians in 10 specialties to the area, improving local availability of services, Lewis said.
Lewis gave much of the credit for the number of doctors willing to relocate to the area’s high-quality school districts, which makes raising children on the North Olympic Peninsula attractive to doctors with families.
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Reporter Arwyn Rice can be reached at 360-417-3535 or at arwyn.rice@peninsuladailynews.com.
