OHSU Hospital Reports Strong First Quarter

Portland’s largest employer is “cautiously optimistic” after the sudden departure of CFO

November 12, 2009 -- Oregon Health & Sciences University’s board tried to walk a fine line between caution and optimism when they met on Nov. 10.

The sudden departure of Larry Revill, the chief financial officer, seemed to captivate the board. But they were reassured by Keith Thomson, board chair, that Revill left because of personal reasons, not because he found anything wrong with OHSU’s finances.  
 
In fact, before Revill left, he knew that the first quarter results were “very positive,” said Thomson, adding that OHSU’s finances had improved “after necessary cuts, but I want to caution everyone that one positive quarter does not make a trend.” OHSU’s first quarter runs from July-September.
 
Last year OHSU had a negative operating margin of $10.7 million, which was reduced to $82,000 during the first quarter. Its consolidated operating margin is now almost $24 million, compared to a $2.1 million deficit last year, and the hospital’s portion of the operating margin saw a $15.5 million increase, compared to $8.5 million during last fiscal year. The university portion also contributed $10.6 million to the operating margin.
 
Meanwhile, OHSU’s net revenue from student tuition and fees increased from $37.4 million in 2008 to $42.9 million this year.
 
It’s too early to say when OHSU will have a new chief financial officer, said Dr. Joe Robertson, president. The position may be filled internally on an interim basis, and the university may use the same national search firm that helped find Revill. “I think we have a good interim team in place,” he said.
 
Then Robertson redirected the conversation to consider the volatility of the healthcare reform debate and praised a recent editorial by Oregonian columnist David Sarasohn, “Is there a doctor in the health care plan?”
 
Based on the experience of Massachusetts which has come close to implementing universal care, Robertson is confident about being able to train more physicians and other providers, while continuing OHSU’s role as a safety net.
 
 “No matter what happens with healthcare reform…I can assure you there will be a significant population whose healthcare will be underfunded,” he said. “We don’t know how this will play out on the national level, but whatever happens, that will not be the last word [on the state level].”
 
Focusing on OHSU’s finances once again, Jon Yunker, who sits on the board, brought up an unexpected topic that hushed the room. “Maybe I’m not supposed to ask this question, but I’m wondering whether this is sustainable.” He was concerned whether OHSU could meet its goals with a reduced staff.

Robertson jumped in, saying “the most painful part of the process was having to lay off  300 OHSU employees during this year’s funding cycle. “The hope is that we’ll be able to eventually replace some of those jobs.” He conceded that cuts to marketing and facilities have reached the point where those programs may not be sustainable. “We need to be getting our message out to the community,” he added.

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