When the state legislative assembly convenes Monday for its 2015 session, don’t expect the Oregon Health & Science University to make any waves.
Brian Shipley, associate vice president of government relations, unveiled a modest legislative agenda at OHSU’s quarterly board of directors meeting last Thursday, including a budget request of $77.3 million in state appropriations from the general fund.
That’s just a tiny sliver of OHSU’s total annual operating budget, which was about $2.2 billion in fiscal year 2014. Support from the state general fund accounted for less than 2 percent of the university’s total budget last year.
Also at the meeting, Lawrence Furnstahl, chief financial officer, presented the fiscal year 2015 first-half results to the board. OHSU operating income during the past six months has fallen $10 million, or 21 percent, compared to a year ago, to $37.8 million, which was $1.2 million above budget for the period.
However, that figure does not include any part of OHSU’s share of the Hospital Transformation Performance Program, a new value-based payment within Oregon’s Medicaid coordinated care system, which is funded by a hospital provider tax.
OHSU expects to receive $19 million from the transformation program, which would put income in line with the past two fiscal years. Furnstahl estimates fiscal year 2015 earnings to be approximately $95 million.
He added that OHSU could boost earnings further by improving its efforts to control year-over-year growth costs, particularly in supplies and services. That would make more funds available for strategic investment.
The $77 million budget request by OHSU represents the same levels of funding for programs as the previous fiscal year, with a 3.3 percent increase as a result of inflation. Together, the budget includes $71.2 million for the schools of medicine, dentistry, and nursing, along with the Child Development & Rehabilitation Center, the Oregon Poison Center, the Office of Rural Health, and Area Health Education Centers.
The remaining $6.1 million in the request is for the Primary Health Care Loan Forgiveness Program and the Scholars for a Healthy Oregon Initiative, which currently has its first class enrolled with 21 students. OHSU requested, and the governor has approved, two years of funding for the program.
The $38 million in operating income in the first half of the fiscal year helped bump up OHSU’s total net worth $28 million to just over $2.4 billion. Total cash and investments rose $14 million during the period, to $739 million, Furnstahl said.
As for the patients that OHSU treats, Furnstahl said that the case mix index remains just under 2.0, which means that the average complexity of cases in the hospital is twice that of a standard hospital in the United States. In the first half of the fiscal year, outpatient visits rose 6 percent.
Another legislative priority for the new session, Shipley said, is to maintain discussions with lawmakers regarding the bonding authority for the Knight Cancer Challenge, and fulfilling associated reporting requirements. Last March, the legislature agreed to issue $200 million in bonds that the university will use to expand its South Waterfront campus. Phil Knight, the founder of Nike, has offered OHSU a $500 million donation for cancer research if the university can match it.
Also at the meeting, Dr. Jeanette Mladenovic, executive vice president and provost, briefed the board on the School of Public Health that OHSU is developing in partnership with Portland State University. The school plans to offer 3 doctorate degrees and five master’s of public health tracks initially. The Lund Report detailed those plans last November.
More than 14,600 people work at OHSU, making it the biggest employer in the state. It says it supports a total of 33,685 jobs and has an economic impact of $4.3 billion, according to a study by EcoNorthwest last year that used 2012 data.
