OHSU Predicts Another Year Of Record Revenues, Profits
Let the good times keep rolling, say Oregon Health & Science University budget officials.
For the fiscal year starting July 1, OHSU forecasts operating revenues will hit a record $3.45 billion, with OHSU hoping to skim off a record $156 million of that as operating profit to be used for expansion projects, according to a budget presentation slated for Thursday’s board meeting.
Ever more patients keep flocking to OHSU’s ever-expanding roster of health care offerings, leading to ever-rising revenues, the budget documents show.
With 16,000-plus employees, OHSU, the marriage of a teaching university, a medical research center and an advanced health care facility, is focused on perpetual growth fed in part by the annual profits that previous growth initiatives are now generating.
Profits, or what OHSU calls “core earnings,” have grown each year since the 2010-11 fiscal year. That year, OHSU produced a profit of $57 million. For the current fiscal year, which ends June 30, OHSU said it is on track for a record $150 million profit on record revenues of $3.2 billion.
Annual profits have become the institution’s mantra because they set up OHSU to continue program and facilities expansions that have made the place a magnet.
In their slide presentation for the board, budget officials noted that universities “are among the longest-living entities on Earth,” pointing out that the University of Bologna was established in 1088, and the University of Oxford was established in 1096. OHSU was established in 1887.
“But if they are not building – great faculty, capacities, reputation – they are declining,” the slide concluded.
OHSU’s goal is to keep revenue growth outpacing cost growth – for example the increasing cost of salaries and other operating expenses – to yield the needed annual profit.
OHSU’s expanding partnership with community hospitals in Oregon draws patients to those community hospitals while drawing referrals from those community hospitals to OHSU, the budget summary said.
In its budget presentation, OHSU touts its remarkable growth curve of the past decade or more. From 2006 to 2018, patient days (the number of full days a patient was at a hospital) at the OHSU hospital were up 35 percent, to 128,000 in 2018; outpatient visits were up 87 percent, to over 1 million in 2018; and revenues were up 136 percent, to $1.8 billion in 2018, OHSU said.
That handily exceeds the growth rate for hospitals in the state as a whole, according to the budget presentation.
In 2006, OHSU hospital’s revenues stood at 13 percent of total hospital revenues in the state as a whole. By 2018, OHSU hospital’s market share had increased to 16 percent of the state’s total of $11.1 billion in hospital revenue, according to the presentation.
In Oregon as a whole, hospital patient days grew 4 percent from 2006 to 2018; outpatient visits grew 44 percent; and revenues rose 96 percent.
OHSU said a key to its financial success is keeping hospital beds filled with paying patients. OHSU hospital’s occupancy rate was 85 percent in 2018, compared with 63 percent at hospitals statewide, OHSU said.
The board is slated to adopt the budget at its Thursday meeting.
At the meeting, the board will also review major initiatives planned through 2026 that could cost $722 million. These include paying down OHSU’s obligation to the state Public Employees Retirement System, which covers pensions for OHSU employees; expansion of the Casey Eye Institute; additional medical/surgical hospital beds; and replacement of the hospital’s neonatal intensive care unit and related facilities.
You can reach Christian Wihtol at [email protected].