OHSU Reports $80 Million in Operating Income

Last week's unaudited financial report puts the university $23 million over budget, partly due to a $9 million settlement from the IRS

September 18, 2012 -- Budget projections for fiscal year 2012 at Oregon Health & Science University called for maintaining earnings at $57 million – and so far the institution has exceeded that goal, according to a financial report presented to its board of directors last week.

Director of finance Lawrence Furnstahl reported the institution saw $80 million in unaudited earnings in the last fiscal year, attributing the surplus to increased patient activity and revenue, as well as a smaller-than-anticipated cut in Medicaid reimbursements and a $9 million settlement from the federal government relating to FICA payments for medical residents between the years of 1996 and 2005.

Furnstahl said OHSU had argued for years that its residents were not employees but interns, and therefore neither the institution nor the residents should have to pay into Social Security, and the Internal Revenue Service – in accordance with tax laws on the books for the years OHSU was paying into Social Security – agreed to reimburse the school what it had paid in federal tax filings. (Rules issued by the U.S. Treasury Department in 2005, and a 2011 U.S. Supreme Court decision upholding those rules, will require medical schools and teaching colleges to pay into Social Security in the future.)

“It's real cash, but it's not an ongoing source,” Furnstahl said of the settlement.

Furnstahl's presentation included targets for controlling Medicaid spending under restrictions set by recent state and federal legislation. The current trend is a 5.7 percent increase in costs per member, per year, with Oregon's new waiver agreement being to lower growth to 3.4 percent per year.

Patient revenue made up nine percent of OHSU's operating income in fiscal year 2012, with tuition and fees making up 11 percent and gifts making up nearly half – 46 percent – of the school's operating income, the report said. Fundraising is at twice the level it was a decade ago, Furnstahl reported. While its headcount has leveled off to about 14,000 employees, Furnstahl also reported that OHSU has created 1,450 new jobs since the 2008 recession.

The board also saw a presentation from OHSU researcher Joel Nigg, Ph.D., who talked about the work his team has been doing into the causes and treatment of Attention Deficit and Hyperactivity Disorder. Nigg started his presentation by saying society's understanding of ADHD may change dramatically over the next few decades, in ways similar to how our understanding of other diagnoses has changed.

Forty years ago, breast cancer was believed to be one specific illness, but the understanding of cancer has become more sophisticated and researchers now realize there are several types of breast cancer with different causes and pathologies. Similarly, what’s referred to as ADHD may actually be a cluster of disorders with similar symptoms, but different causes.

Nigg's research focuses on the developmental origins of the disorder, including maternal nutrition and economic issues. His team has made a specific effort to engage families and communities in its research. In particular, the team has been reaching out to communities of color in the Portland area, including African-American churches and Latino health groups.

Board president Charles Wilhoite asked whether the outreach efforts are simply to make sample groups more diverse, or whether researchers believe ADHD disproportionately affects children of color.

Nigg said the team is trying to get a better sense of how much cultural factors influence diagnosis. For instance, one diagnostic criterion for ADHD is “calls out in class,” he said, adding that in many African-American churches, calling out during services is expected, where in other religious communities, it's considered rude – which teachers referring children for diagnostic evaluation may not understand.

Nigg said researchers' understanding of the disorder, once it develops, has vastly improved over the last 40 years, but treatments haven't really changed. He hopes getting more information about underlying causes will improve long-term outcomes for patients.

“It's like we're giving aspirin and stopping the better fever, but not stopping the problem. Rather than giving a better drug let's give a better explanation,” he added.

Image for this story by Cacophony (CC-BY-SA 3.0) via Wikimedia Commons.

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