PORT ANGELES — Olympic Medical Center has put the brakes on spending this year.
As the public hospital district faces massive cuts in state and federal reimbursement, the six-member board voted unanimously Wednesday night to approve a financial stability plan for 2012 that reduces capital spending by $5.5 million.
A significant piece of the plan is a one-year delay in the expansion of the emergency room at the Port Angeles hospital, a move that will save $4.5 million.
“I think it’s the bare minimum,” Chief Executive Officer Eric Lewis said of the seven-point financial strategy.
“Depending on what Washington, D.C., and Olympia do to us, I think it’s very likely that we’ll have to do additional expenditure cuts.”
In addition to delaying the ER expansion, which was previously scheduled for 2013, OMC will defer $1 million in other capital spending until next year or beyond.
Hospital officials have said an ER expansion is overdue. Overcrowding has been a concern for patients in the nine-bed unit, which will eventually be expanded to 21 beds to the tune of $8.3 million.
Urgent care in Sequim
In a related matter, OMC will consider opening an urgent-care clinic in Sequim later this year.
“Should the board approve that, we’ll be looking for physicians and advanced clinical practitioners to staff kind of a walk-in clinic to increase access for people that need acute care immediately that don’t have access,” Lewis said.
“I will say the economics of the urgent-care or walk-in clinic are really tough. A lot of hospitals have lost a lot of money with these,” he added.
“I think when we put this together, we’re going to try to get a break-even, but there is a chance of losing money as you set up a walk-in clinic due to payor mix and costs.”
Dr. John Miles, board chairman, said a walk-in clinic in Sequim would ease overcrowding at the Port Angeles emergency room.
“That’s certainly a positive reason to do it,” Lewis said.
The third point in the 2012 financial stability plan is legislative advocacy for health care reimbursement to hospitals.
Deep cuts from Medicare and Medicaid are on the table, but the direct hit to OMC remains unclear.
Gregoire proposal
Gov. Chris Gregoire has proposed that the state Legislature eliminate Basic Health and Disability Lifeline, which paid OMC a combined $3 million in 2011.
“At the very least, they’re going to get drastically cut back,” Lewis said of the state programs.
Exactly three-fourths of OMC’s business in 2011 came from the government: 55 percent from Medicare, 12 percent from Medicaid and 8 percent from other programs.
Medicaid pays OMC 53 percent of what it costs to treat its patients.
OMC had $9.5 million in uncompensated care last year.
“Advocacy has to be a major goal,” Lewis said.
The fourth goal in the financial stability plan is to generate $1 million in new revenue by expanding local health care services.
“We know that tens of millions of dollars and many patients leave the community to go to Silverdale or Seattle for services that we could provide locally, particularly if we could recruit neurologists, expand cardiology, sleep medicine, orthopedics, cancer care, primary care and other services,” Lewis said.
Overall, patient volumes at OMC were up 1 percent in 2011 over 2010.
The driving force was radiation oncology, which saw a 25 percent spike in volume since the cancer center launched a high-tech linear accelerator in April.
“That has been very positive because patients can get their care locally in a very high-quality, safe way,” Lewis said.
The remaining points in the financial plan are as follows:
■ Cut expenses by at least $1.5 million from budgeted amounts by reducing new hires and overtime and limiting pay raises.
■ Expand the new affiliation with Swedish Medical Center with a focus on a buying group, electronic medical records and clinical services.
■ Adjust hospital employee benefits to market.
When introducing the financial stability plan Feb. 1, Lewis emphasized that OMC has no plans to cut patient services, outsource or lay off employees.
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Reporter Rob Ollikainen can be reached at 360-417-3537 or at rob.ollikainen@peninsuladailynews.com.
