PORT ANGELES — The question doesn’t appear in the election that ends Tuesday, but the time to answer it soon will probably arrive:
Must Clallam County Hospital District No. 2 — Olympic Medical Center — raise taxes?
The issue has surfaced regularly over the past year.
It returned last Wednesday at OMC’s public hearing on its proposed 2007 budget.
Amid all the numbers that Chief Financial Officer Eric Lewis flashed on the screen in a PowerPoint presentation for hospital commissioners and the public, one little digit rang an alarm that the hospital and its affiliated clinics are nearing the time when they must seek new revenue:
OMC’s operating margin of 1 percent.
Financial shoals
Hospital Administrator Mike Glenn and Lewis have striven to keep that number above 3 percent in past years — even above 4 percent — to fund capital improvements.
Now, with Glenn departing for a job in Olympia, Lewis as interim administrator must navigate some financial shoals.
OMC is in the midst of three major construction projects — an addition to its cancer center in Sequim, a new Ancillary Services Building on the same campus and an addition to its central hospital in Port Angeles.
The work totals more than $11.3 million in the 2007 budget.
The hospital also is negotiating to buy the former Virginia Mason clinic on Eighth Street in Port Angeles and to remodel it — plus a clinic it already owns at 923 Georgiana St. — to hospital standards.
The improvements will allow OMC to bill Medicare under both Part A (70 percent of a patient’s bill) and Part B (26 percent).
These expenditures are only part of a $20.2 million capital outlay that includes:
* Nearly $600,000 for an electronic records system and other equipment
* $3.4 million for radiology improvements
* $2.7 million for medical equipment
* $1.3 million for information technology
* A $500,000 contingency cushion (all figures are rounded to the nearest $100,000).
Lewis called the budget “the most challenging” in his eight years of preparing annual outlays.
Not impossible, CFO says
While it is challenging, it isn’t impossible, he said, and completing most construction in 2007 should make the following year easier.
“Looking to 2008, I’m optimistic we’re positioned the district very well,” he said.
