Olympic Medical Center reports operating losses

Hospital audit shows $28 million shortfall

PORT ANGELES — Olympic Medical Center posted an operating loss of $28 million in 2023 as it continues to work to regain its pre-COVID financial footing.

Mary Wright of auditing firm Moss Adams presented OMC’s 2023 financial statements last Wednesday that showed it had operating revenues of $238 million and operating expenses of $266 million.

“The pace of the loss was extreme [in 2022], there was massively growing expenses leading to these massive losses as well, and the operating as well as excess margin was definitely a concern,” Wright said. “Now, there’s still losses, unfortunately, but the pace has slowed.”

OMC faces the same challenges continuing to impact Washington state hospitals whose expenses are increasing faster than their revenues, particularly in the areas of staffing, supplies and services, Wright said.

While OMC’s revenues have increased 9 percent since 2019, its expenses have increased 27 percent over the same time period. The cost of supplies and services now eats 33 percent of its operating revenue compared with 27 percent in 2019.

Bad debt — funds it can’t recover from patients unable or unwilling to pay their bills — has increased 80 percent from $2.5 million 2019 to $4.5 million in 2023. It provided $4.5 million in charity care last year for indigent and low-income patients compared with $2.2 million in 2022.

OMC is among 85 percent of hospitals that lost money last year, according to the Washington State Hospital Association.

“When 85 percent of the revenue for any business is based on not paying the cost, that just is inherently a losing proposition,” commissioner Phyllis Bernard said. “The more service you provide, the deeper a hole you’re in. That is something that requires a solution beyond what management is able to achieve.”

Wright pointed out that OMC’s days of cash on hand had dipped below the 60-day threshold required by one of its bond agreements in 2022 and 2023, but the bank provided a waiver so it would not be in default. Had the bank decided to take action, Wright said, OMC’s interest rate would have increased about 3 percent.

Moss Adams originally had planned to present OMC’s final report in February, but compliance with Government Accounting Standards Board (GASB) financial and accounting standards, particularly the recent GASB 96 that covers costs and investments related to subscription-based information technology, had created additional work that required additional time for the audit process, Wright said.

In his report to the board, Chief Executive Officer Darryl Wolfe said OMC would receive a distressed hospital grant of $262,000 from the Washington State Health Care Authority.

Although it is less than the $450,000 it received last year, “We’ll take it,” Wolfe said.

OMC also will receive funds through the Medicaid SNAP program.

OMC has continued to implement the recommendations from Advanced Operations Partners, the consulting firm it hired last year to advise it on strategic planning and operations management, Wolfe said. It halved the number of travelers it contracted with last year and is seeking to eliminate 11 locum positions.

“We’ve identified about $75,000 in savings in office supplies over the last six months,” Wolfe said. “The next phase of that is pharmaceuticals, which is a huge expense for us, as you would expect. We will be looking more closely at pharmacy and purchasing — where can we save money there?”

The Centers for Medicare and Medicaid Services errors that were discovered last fall have been resolved with assistance from the office of U.S. Rep. Derek Kilmer, D-Gig Harbor. OMC should be receiving funds it is owed sometime in May, Wolfe said.

A new telecardiology service that enables remote practitioners to interpret electrocardiogram results is expected to be up and running in June, Wolfe said, eliminating the need to send some less-critical patients out of the area for care.

“The goal is to make sure that we can provide more services to our hospital team here at OMC and give them more support for a lower-end cardiac event,” he said. “We have great capacity here at OMC, and this will allow us to serve more people here at a community level.”

The second of OMC’s public forums that it intends to host every month this year will take place at 6 p.m. May 9 at Linkletter Hall at Olympic Memorial Hospital, 939 Caroline St.

Wolfe will present an overview of OMC’s finances, plans and operations and answer questions.


Reporter Paula Hunt can be reached by email at paula.hunt@peninsuladailynews.com.

More in News

Members of the Mount Olympus Detachment 897 of the Marine Corps League give a 21-gun salute at a Memorial Day ceremony at Mt. Angeles Memorial Park in Port Angeles on Monday. The ceremony was hosted by the Veterans of Foreign Wars Post 6787 of Carlsborg and was one of many Memorial Day events held in Clallam and Jefferson counties. (Peter Segall/Peninsula Daily News)
Solemn ceremonies honor America’s war dead

Flowers, wreaths decorate gravesites across Peninsula

Peninsula College, teachers agree on contract

Three-year deal to raise faculty salaries

Clallam County pledges $1.5 million toward preserving two farms

Commitment would provide conservation easement on properties

Cub Scout Pack 4479 laid about 200 flags on graves of veterans at the Catholic Cemetery and the front portion of Laurel Grove Cemetery in Port Townsend to honor veterans who have died. Jim Little from Troop 1479 instructed the Cub Scouts prior to dispersing them to post the colors at graves that were either marked with a star by the VFW or an inscription that indicates past military service. (Lolo Sherwood)
Honoring veterans

Cub Scout Pack 4479 laid about 200 flags on graves of veterans… Continue reading

Piping plan could be reinstated

Votes reaffirm Sequim board members

Sequim police propose updated noise control ordinance

Public hearing set June 10 at civic center

Members of the Captain Joseph House Foundation gather in October to celebrate the gifting of a Gold Star Monument marker in front of the Captain Joseph House in Port Angeles. (Courtesy photo)
Captain Joseph House to host Memorial Day ceremony

Respite home provides space for Gold Star Families

Memorial Day ceremonies set across Peninsula

Public invited to events in Port Angeles, Port Townsend, Sequim

Dash Air to pursue a public charter

Model would change from commercial service

Board recommends $940K for Clallam Bay-Sekiu sewer

Two lift stations would be replaced in coming year

Investigators seeking woman who used ATM

Items involved in officer-involved shooting sent to state crime lab