BY PEPPER FISHER
Port Angeles – The Olympic Medical Center Board of Commissioners got a clear-eyed commentary Tuesday on why the hospital is struggling financially and what the plan is to fix it.
Interim CEO Mark Gregson began by telling the board that representatives for CMS, the federal agency that has threatened to stop Medicare payments to the hospital, were on hand most of last week going over updated records, and would be getting back to them with a report in 10 days.
“Many of the things they found we addressed. There is areas that they found, I think, that allows us the opportunity to make some changes, improvements. We made notes on all those. And we’re continuing to make efforts on every single one of those items they identified to make changes, improvements, so that we can have those be eliminated. But I think they’re truly interested in working with us, and helping us remedy those things that need to be addressed. What we don’t know is, was it enough? And we’ll know that in 10 days.”
Interim CFO Dennis Stillman was on hand to give a sobering report on the hospital’s financial challenges. He said that when OMC issued bonds over the years, it promised to maintain 60 days’ worth of cash on hand to cover expenses in case of tough times. He said they were about $30 million short of that commitment today.
Stillman acknowledged that the pandemic hurt hospitals throughout the country and that many of them are struggling like OMC, but he said as the hospital’s revenues were dropping, spending on new equipment and other expenses stayed the same for too long. He pulled no punches in his report.
“In 2021 we made a profit of six million dollars. We lost 16 million in 2022. We lost 28 million in 2023. We lost 12 million in 2024. And I project that, if we continue as we’re operating, we’ll lose about 16 million dollars this year. In 2021, we owed our vendors about 8 million dollars. Now we owe our vendors about twenty nine million dollars. So we haven’t been paying our bills on time. So our vendors aren’t happy with us. We have to change.”
Gregson, whose specialty is getting struggling hospitals back on their feet, spoke again to lay out his plan for how the hospital was going to recover financially. He talked about cost-cutting measures, not ruling out a reduction in staff. He said reimbursement of travel expenses will be going away, mentioned a total review of all planned purchases and ongoing payments for equipment, a monthly audit of every department’s spending, and other measures.
“That’s the discipline that we’re going to be bringing to this. Because we have to, number one. And furthermore, it’s the right thing to do. I, at the end of the day, believe this is very doable. This is not something where I need to come to you and say, “We need to have a different conversation.” I don’t believe that’s the case. I believe this is doable. I believe it’s something that can be improved. This isn’t going to be easy. If it was easy, you would have done it before now. And, as has been noted, we’re not alone. And to a certain degree, that’s nice. But that doesn’t matter. We have to deal with us.”