PORT ANGELES — Olympic Medical Center’s decision to embark on a path to explore a partnership with another hospital system has sparked concern about the future of the independent public hospital and its delivery of services, particularly reproductive health care.
OMC CEO Darryl Wolfe and board President Ann Henninger explained the reasons behind seeking a possible merger and addressed apprehensions about its potential impact at a public forum Feb. 26 sponsored by the Clallam County Democrats at its downtown Port Angeles headquarters.
Wolfe said the primary motivation for making the decision in December was to regain OMC’s financial stability so it could continue offering high-quality care into the future.
“It’s about jobs, it’s about access and it’s about service. That’s what we’re trying to protect,” he told the audience of about 25 people. “We had 62 people in OMC today (Wednesday) and we have 67 beds, that includes the bassinets, and we saw over 100 people through our ED (emergency department) yesterday.
“In 2024, we delivered 380 babies and had 27,000 ED visits, 8,100 surgical procedures and 136,000 clinic visits. We want to preserve all of it.”
Wolfe does not how a merger between the public hospital district and another entity might work, but there are other examples in the state where this has occurred.
Consolidation in the health care industry has seen an uptick over the past 20 years, and it accelerated after the pandemic as hospitals become squeezed by the same forces as OMC.
“This is happening in a lot of places across the country, and there’s people right behind us in our state,” he said. “They’re going to be going through the same process because they can’t keep going it alone.”
Many of the questions submitted online and from the audience were regarding a conceivable merger with a Catholic hospital system that would place restrictions on women’s reproductive health services, specifically abortion.
The issue is one that has dominated public comment at board of hospital commissioner meetings since the organization voted to pursue a merger more than two months ago.
“I understand that’s a huge concern, but our goal is to maintain everything we’re currently doing,” Wolfe said.
“This is about the whole organization. This is about all of our services,” he said. “We want to make sure people keep in mind this is about the ER. This is about acute care beds. This is about clinic visits. This is about specialists doing surgeries. This is about all those things and really trying hard to find the best path forward.”
He noted that some faith-based organizations have secular facilities within them that provide services not approved under Ethical and Religious Directives for Catholic Healthcare Services. In addition to abortion, they can include contraception and aid in dying.
Selling to a hedge fund is unlikely to happen because it would not be the right fit for OMC or the community, Wolfe said.
Wolfe linked OMC’s current financial challenges to the COVID-19 pandemic that began in March 2020 and ended three years later. Like hospitals across the state and country, OMC’s operations were upended and have only partially recovered.
“Even in good times, we were on a slim margin, but we were able to keep up with our salaries, we were able to pay principal interest on our debt and continue to invest in infrastructure, but the pandemic really changed the dynamics,” he said.
Since the pandemic, the cost of care has risen 15 percent, equipment and supplies almost 20 percent and pharmaceuticals 23 percent, he said.
To get a handle on costs, the hospital has reduced its expenses by almost 10 percent and trimmed the number of contract providers it relied on when the hospital was filled with COVID-19 patients from 80 to fewer than 25.
The lack of funds has meant OMC has not invested in capital projects like much-need facility upgrades.
“We’re only replacing things that are necessary to keep operating,” Wolfe said. “We don’t have anything extra cut.”
OMC projects a $3 million loss in 2025, but that amount could balloon if the state’s Safety Net Assessment Program, which enhances payments to hospitals for Medicaid patients, disappears due to changes at the federal level, he said.
Last year, OMC received $12 million through the program, which was “very, very helpful,” Wolfe said.
He also thanked voters for approving the levy lid lift in the Aug. 6 primary that increased the district’s tax collection rate from 31 cents to 75 cents per $1,000 of assessed property value.
Central to OMC’s financial problems has been Medicare’s significant underpayment for delivering care. The federal insurance program reimburses OMC just 82 cents for every dollar it costs the hospital to treat people on Medicare, who make up 64 percent of its patients.
“Our position has become more and more difficult and more and more precarious from an economic perspective,” Wolfe said.
A merger with another system is not guaranteed. The board at any time can decide to end the exploration process, which is being guided by the consulting firm Juniper Advisory. According to Juniper’s website, “A little over half of our clients decide not to pursue transactions.”
The board is now on the point of evaluating health systems that Juniper has selected. In April and May, it will either identify a partner or choose to remain independent.
“This process is about determining if a partnership with another organization would be the right step for us and our patients and this community,” Wolfe said. “We’re excited about the potential this could have to help us grow and improve access.”
Information about OMC’s exploration of a partnership can be found on its website at tinyurl.com/mr3r7n73.
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Reporter Paula Hunt can be reached by email at paula.hunt@peninsuladailynews.com.
