OHSU Chills Spending Ahead of State Cuts and Uncertainty about the ACA

Oregon Health & Science University is holding off on discretionary spending and hiring as “prudent cost containment” in anticipation of state Medicaid cuts and “uncertain times ahead” during the Trump administration, President Joe Robertson told the OHSU board of directors yesterday.

Overall, OHSU’s financial fundamentals look strong. Operating income for the first half of fiscal year 2017 was $52 million, $6 million above budget projections although below the same time last year. Consolidated net worth is up $116 million, passing the $3 billion mark with long-term debt falling by $23 million to $884 million.

At the same time, continuing shortfalls at OHSU Hospital and Tuality Healthcare were offset by stronger financial performance at Salem Health. Average payments were flat at OHSU Hospital, while patient activity was 2 percent above target and 7 percent ahead of last year.

But trouble lies ahead. “The ACA (Accountable Care Act) is under siege,” and Medicare and Medicaid are likely to see changes, Robertson said, prompting “not a hiring freeze but more of a chill.”

In addition to uncertainty about what the Trump administration will do, Gov. Brown’s proposed 2017-2019 budget seeks to offset a $1.7 billion state budget shortfall by reducing Oregon Medicaid payments to hospitals by $400 million per biennium. OHSU is the largest single hospital in Oregon, treating 15 percent of the state’s Medicaid patients, CFO Lawrence Furnstahl said.

OHSU will focus on state appropriations and the Medicaid budget during the upcoming legislative session along with clean-up of a dental supervision bill, raising the legal age for tobacco use to 21 and requiring rear-facing car seats for children under age 2, said Abby Tibbs, associate vice president of government relations.

But Tibbs is worried about the Trump administration’s “attack on science” and suspects the Legislature will be busy with bills to respond to federal issues such as immigration, abortion rights and guns.

“It’s an increasingly chaotic time,” Tibbs said.

Jan can be reached at [email protected].

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