OHSU Profits Even Higher Than Expected
The 2018-19 fiscal year was even more financially fruitful for Oregon Health & Science University than expected, according to a new report to be presented to its board on Friday.
OHSU garnered a record operating profit of $175 million on record operating revenues of $3.2 billion, according to the unaudited financial results.
The state’s cornerstone medical institution has known for months that the fiscal year ending June 30 was shaping up to be a winner. Earlier this summer, it had forecast an operating profit of $156 million. https://www.thelundreport.org/content/ohsu-predicts-another-year-record-...
The bumper crop of cash is the result of higher than expected patient revenues as well as more grants and contracts, the financial summary shows.
OHSU officials have said a steady stream of annual profits are crucial to providing the money for new facilities and equipment and expanded programs.
OHSU’s budget for the most recent fiscal year had forecast a profit of $115 million. But revenues came in $150 million over budget, while expenses such as salaries and benefits and services and supplies came in only $90 million higher.
The institution forecasts the good times will continue in the current fiscal year, budgeted to yield an operating profit of $145 million on operating revenue of $3.45 billion.
Strong Market Lifts Investments
OHSU’s cash and investments rose to a record $1.22 billion as of June 30, up from $1.05 billion a year earlier. The rise was caused by “strong earnings, fixed-income investment returns and slower initial spending on the hospital expansion project,” according to the fiscal report.
OSHU’s net worth – its assets such as investments and facilities minus its liabilities such as bonds and pension obligations – has increased 113 percent since June 2010, a compounded annual growth rate of 8.8 percent, according to the report.
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. It keeps succeeding at that, in large measure due to briskly rising patient volumes.
Ambulatory visits hit 987,024 in the most recent fiscal year, up 3.3 percent from the year before. Day/observation visits were up 4.8 percent, to 42,320. Surgical visits were up 4.3 percent, to 37,080. The average daily census of inpatients was up 2.7 percent, to 476. The only significant drop was a small reduction in emergency department visits, down 0.1 percent, to 47,856.
Those figures helped generate a 9 percent year-over-year growth in net patient revenue.
Meanwhile, OHSU managed to keep salaries and benefits to a 7 percent increase.
OHSU is holding on to a significant number of patients covered by commercial health insurance. Its percentage of commercial-insurance patients is holding steady at just above 40 percent, with the balance coming from patients covered by government Medicaid and Medicare. OHSU notes in the budget document that commercial insurers pay roughly double the rate as government payers for the same care.
Like other Oregon hospitals, OHSU has been helped financially by the expansion of Medicaid from 2015 onward to cover more patients. That’s translated into far fewer patients who lack health insurance. Only about 1.3 percent of patients now lack insurance, compared to 4-5 percent prior to the Medicaid expansion. OHSU’s “charity care” - the amount it spends on patients who can’t pay for care - has dropped to about $35 million a year, down from $70 million-$80 million a year before the expansion.
You can reach Christian Wihtol at [email protected].
Sep 24 2019