OHSU Making Changes After Law Firm’s Report

Oregon Health & Science University will spend the first quarter of 2022 planning how to carry out a law firm’s recommendations to fix misconduct, diversity and equity problems, and also take some immediate steps in those areas.

In a summary of the plan to be presented to OHSU’s board of directors on Friday, staff said immediate steps include filling a vacancy at the top of human resources, focusing on “diversity hires” when seeking external candidates, and streamlining ways for employees to report incidents of misconduct or other problems.

Meanwhile, OHSU President Danny Jacobs has developed an “implementation framework” to carry out the Covington investigation’s recommendations, according to the plan’s summary. Steps include forming “governance groups” and “governance group charters” this month, developing “project charters,” staffing plans and project budgets in February and March, and starting to carry out projects from April onward.

The effort will be overseen by a 21-member oversight committee with representatives from such groups as students, nursing, police, classified employees, graduate researchers, administrators and research assistants, as well six members of the community at large.

The summary included few specifics, but the Covington report — for which OHSU said it paid $6.4 million — said OHSU needs to clarify its diversity, equity and inclusion goals, integrate those goals into OHSU operations, strengthen accountability and hire experienced leaders and more staff for human resources, among other things.

The 51-page report was written by a team of investigators headed by former U.S. Attorney General Eric Holder and partner Nancy Kestenbaum of the firm Covington & Burling LLP.

 OHSU hired Covington following high-profile incidents that brought into question how OHSU handles sexual harassment and other misconduct. Incidents included the 2019 departure of the head of OHSU Emergency Medicine following an internal investigation, and a sexual harassment lawsuit filed by a former OHSU social worker against a resident doctor, Jason Campbell, who achieved brief prominence as the “Tik Tok Doc” in viral dance videos.

The former social worker alleged that many people at OHSU knew of her allegations that Campbell harassed her, but failed to report him to HR. Instead, she claims, he was protected while she was shamed.

OHSU settled the case by paying $585,000. OHSU publicly apologized to the plaintiff but did not admit to violating any laws.

According to the summary, OHSU is moving on one key problem Covington highlighted: a weak human resources department.

Greg Moawad, who had been head of campus safety at OHSU, was appointed as interim head of human resources in 2019, according to the law firm’s report. He was told the job would last only nine months, but he remained there for nearly two years, stepping down in June 2021. His replacement was a temporary one, Serilda Summers-McGee, an external HR consultant.

With 19,000 employees, OHSU had 130 human resources staffers, including 18 "human resource business partners" who liason with specific units of the system, Covington said. That's way too few liason workers, Covington concluded.

In its report, Covington concluded that OHSU had failed to support diversity, equity and inclusion; that community members don’t feel the institution supports people who report misconduct; and OHSU is not equitable in holding employees accountable for misconduct.

COVID Still Hurting Revenues

Meanwhile, in a financial update to the board, OHSU Chief Financial Officer Lawrence Furnstahl reported that operating finances continue to be hammered by the COVID-19 pandemic, with patient revenues down due to cancelled surgeries, and expenses for staff jumping upward.

But OHSU’s net worth — its assets minus its liabilities — continued to rise for the first six months of the fiscal year, through Dec. 31, according to the update.

Net worth rose $60 million, due mainly to good stock market returns plus donations to OHSU’s foundation.

Still, operating finances were a bleaker picture, running $31 million in the red for the first six months of the fiscal year.

“The greatest unknown is how quickly healthcare can recover this spring toward normal operations, staffing costs and surgical volume, especially given how exhausting the recent surges have been,” Furnstahl wrote.

Operating revenues for the first six months of the fiscal year, which started July 1, totaled $1.94 billion, but operating expenses were $1.974 billion. Salaries and benefits rose to $1.22 billion for the six months, up from $1.07 billion for the same period a year earlier. The drivers included overtime and incentive payments, he wrote.

OHSU had budgeted for a $39 million profit for the current fiscal year.

Furnstahl said he’s looking at ways to reduce the operating losses for the current fiscal year and is planning a budget that will have a 2% operating profit margin for the fiscal year starting July 1. OHSU has historically had annual operating profits of about 5%, he noted.

The institution seeks steady profits to salt away for capital projects and to bolster its reserves and thereby earn good bond ratings that lower its cost of borrowing.

For the first six months of the fiscal year, OHSU had investment returns of $40 million, boosting its cash and investments to $1.66 billion, and its foundation had $47 million in gains, mostly investment returns plus $7.8 million in donations, taking it to $1.64 billion.

OHSU’s net worth rose to $4.2 billion.

OHSU operates a system of hospitals and clinics, as well as schools for dentistry, medicine, nursing, pharmacy and public health. Formerly a part of state government, the university was approved by the Oregon Legislature to become a quasi-governmental public corporation in 1995.

 You can reach Christian Wihtol at [email protected].