Olympic Medial Center considers how to expand emergency service in Sequim

Regulatory issues big hurdle for opening hospital


SEQUIM — Olympic Medical Center is in the “discovery phase” of a plan to expand urgent care service in Sequim, CEO Darryl Wolfe said.

Hospital officials have begun an analysis of ways to reduce the regulatory and fiscal barriers that have prevented OMC from offering emergency services in eastern Clallam County, Wolfe said last week.

“This is a massive undertaking, and what I need to be sure of is that whatever we do do is fiscally responsible for the entire district,” Wolfe said in a Sequim-Dungeness Valley Chamber of Commerce meeting Tuesday.

“Maybe we can do it, but I think right now we’re still in the discovery phase.”

Given its proximity to the Port Angeles hospital and Jefferson Healthcare in Port Townsend, Sequim OMC could not open a second hospital under existing Centers for Medicare and Medicaid Services (CMS) guidelines, Wolfe said.

He added that the emergency room in Port Angeles has a $10 million annual budget, not including 24-hour medical staff, laboratory services and imaging.

“It’s a major undertaking, and I’m not going to lie to you,” Wolfe said.

OMC’s Sequim campus on North Fifth Avenue has a cancer center, primary care clinic and medical services building with a walk-in clinic that is open seven days a week from 8 a.m. to 5 p.m.

A chamber representative who works at the Sequim Visitor Information Center said she receives near-daily queries like “when are we going to get an ER?”

Wolfe said he often hears the same question.

“My goal is to have an analysis done that I’d like to present to the city of Sequim at an appropriate time,” Wolfe said.

“Maybe there’s a path here, but I don’t know what that is at this time.”

Meanwhile, OMC continues to forge ahead with improvements to its Sequim campus.

A recent expansion of the Sequim Cancer Center added chemotherapy capacity and a “much larger pharmacy,” Wolfe said.

The nonprofit Olympic Medical Center Foundation is helping the public hospital district purchase a $6 million second linear accelerator for the Sequim Cancer Center.

OMC serves a district that stretches from the Jefferson County line to Lake Crescent. It accepts patients referred by Forks Community Hospital and has a home health agency that also covers the West End.

The 67-bed hospital in Port Angeles has a Level III trauma center with 24-hour emergency services.

OMC providers deliver about 480 babies and perform about 8,400 surgeries per year, Wolfe said.

The hospital and its satellite clinics employ about 1,600 Clallam County residents, but 218 of those positions were unfilled as of Tuesday.

“Just like all of you, we have staffing shortages,” Wolfe told Sequim business owners.

OMC recently hired a half-time cardiologist and was actively recruiting other physicians, Wolfe said.

“We’re doing all we can on the recruiting front,” Wolfe said.

“The staffing shortage is not a function of our budget. All those open positions are actually in our budget.”

OMC has a $240 million annual budget and operates on a 2 to 3 percent margin. About 83 percent of OMC’s revenue comes from Medicare, Medicaid or other government insurance.

“Many hospitals balance the books on the commercial payers, which pay a little bit better, in essence,” Wolfe said.

“We have a small slice of that, so we really are in a tough spot. We spend a lot of our time in Olympia and in (Washington), D.C., pleading our case.”

OMC took a financial hit in 2018 when CMS cut Medicare reimbursement for off-campus clinics, which had a disproportionate impact on Sequim campus development, Wolfe said.

“We will be maintaining all services and still incrementally growing the ones that we have,” Wolfe said.

“That is our plan, but that (CMS) decision definitely took the wind out of our sails. What it effectively did was any hospital-based entity that’s not within 250 yards of our main hospital took a 60 percent cut on a good chunk of the reimbursement, basically.”

OMC, which sued the federal government, continues to absorb about $1.5 million in annual cuts as a result of the CMS decision, Wolfe said.

“The legal challenge has run its course,” Wolfe said.

“We did not win there. However, we do have a lot of local support from Congressman Derek Kilmer, and he is a huge advocate of OMC.”

Kilmer, D-Gig Harbor, was born at OMC and raised in Port Angeles.

Wolfe, a 1988 Sequim High School graduate and former OMC chief financial officer, became CEO when former chief executive Eric Lewis retired last year. The CEO reports to a publicly elected seven-member board.

Like his predecessor, Wolfe said he will fight to keep OMC locally owned and operated.

“We think the best decisions for Clallam County should be made in Clallam County,” Wolfe said.

OMC spent about $10 million responding to the COVID-19 pandemic last year and lost about $3.5 million on its operations in 2020.

Offices on the second floor of the hospital have been reconfigured to support a 15-bed COVID-19 surge wing.

“We are still anticipating that surge,” Wolfe said.

“I hope it doesn’t happen, but we are still prepared.”

Wolfe, who was making his first in-person public appearance since the pandemic began, encouraged the audience to follow public health guidance.

“Our best line of defense right now — I know not everyone’s vaccinated, I’m not going to go there — but masking, good hygiene with your hands, keeping your distance, I think we need to keep doing that,” Wolfe said.

“As we talk about things like this Delta variant, which is exponentially worse than what we’ve been dealing with before, it’s really serious for us.

“It’s something that we worry about a lot, because if it’s as transmissible as they say, it can overwhelm our system pretty fast,” he added.


Reporter Rob Ollikainen can be reached at [email protected]lynews.com.

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