PORT ANGELES — Olympic Medical Center is projected to lose an estimated $25 million in net income this year, even as it has instituted across-the-board cuts in expenses and made strides in reducing its reliance on travel workers.
Chief Financial Officer Lorraine Cannon told commissioners at their Wednesday meeting the forecast was based on revenue and expenses collected through August. The information was included as part of her 2024 draft budget presentation.
Next year’s financial picture is looking much better, Cannon said. OMC is anticipated to lose $1.2 million based on increases in the volume of patients, price adjustments of about 5 percent, a bump in levy collection of 1 percent, sustaining cost savings and continuing to recruit nurses and other clinical staff.
Helping with OMC’s bottom line next year is a payment of an estimated $9 million for Medicaid services through the Washington State Hospital Safety Net Assessment program (SNAP), Cannon said.
Chief Executive Officer Darryl Wolfe said poor Medicare and Medicaid reimbursements have contributed to OMC’s financial problems.
“The goal is to have the Medicaid program pay us closer to costs in general,” Wolfe said Wednesday. “Instead of 60 cents on the dollar, we get closer to 90 cents on the dollar. It (SNAP) doesn’t solve all of our problems, but it does get us at least closer to that.”
The 2024 draft capital budget of $12 million for medical and non-medical equipment and other expenses is significantly less than the $19.1 million in this year’s budget.
“Everyone is cognizant of what’s going on and what we need to do,” Cannon said. “People were very thoughtful about what they wanted and what they needed for next year.”
According to the overall draft budget, OMC’s operating revenues are forecast to increase 11.6 percent from $240,267,021 to $268,191,618, and its operating expenses are forecast to increase just 1.6 percent from $265,166,053 to $269,368,135.
“How confident are you in the revenue projection at 11.6 percent higher than 2023 through the combination of volume and price increase?” Commissioner Philip Giuntoli asked.
“I’m comfortable with the number,” Cannon said. “It’s not something that I just guess at. We talked with the directors about what they think about the volumes. Given the information that I know at this point, this is very achievable to me.”
Commissioners approved a $295,000 agreement with Advance Operating Partners, a strategic and management consulting company that earlier this year worked with OMC in helping it find ways to improve its operations.
Wolfe said OMC would benefit from AOP’s continued assistance in helping it move toward financial stability.
“We are not even close to where we need to be,” Wolfe said. “They can help us to a different way of doing things.”
The 13-week contract will involve AOP setting up an office on site with two full-time employees as well as medical professionals.
“We can’t not afford to do this,” Commissioner John Nutter said.
Giuntoli agreed.
“This is a ‘must do,’” Giuntoli said.
Meanwhile, Dr. Allison Berry, the public health officer for Clallam and Jefferson counties, reported to commissioners that rates in respiratory illnesses, including COVID-19, flu and respiratory syncytial virus, are showing a slight uptick heading into the holiday season. She recommended people be vaccinated if they have not already done so.
Vaccines greatly reduced the number of people with severe COVID-19 symptoms, she said, and if the disease follows last year’s trend rates, it will go up around Thanksgiving and Christmas.
Berry told commissioners that Clallam County has the highest infant mortality rate in the state driven by poverty, substance abuse and poor access to prenatal care. She said her office is working with community partners like the First Step Family Support Center and REdisCOVERY to try to improve outcomes by educating parents and providing harm-reduction services.
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Reporter Paula Hunt can be reached at paula.hunt@peninsuladailynews.
