PORT ANGELES — Operating expenses were $677,000 under budget at Olympic Medical Center last quarter, but operating revenue was off $1.95 million, leading to a 74 percent shortfall in net revenue.
The North Olympic Peninsula’s largest hospital district had a 1.4 percent total margin — the difference between expenses and revenue — last quarter, which is well short of its key financial goal to have a 4 percent margin.
The margin fell from 6.3 to 5.7 to 2.3 percent in the last three quarters of 2009.
“The thing to note here is we experienced something similar in 2009 first quarter, where we had a 1.2 percent margin,” Chief Financial Officer Julie Rukstad told the seven-member board on Wednesday.
“We still want to see the 4 percent margin because that’s what we strive for — being able to finance our capital projects.”
Net revenue was $434,000 last quarter compared with a budgeted amount of nearly $1.7 million.
Operating margin — what nonprofts such as OMC call profit — was 0.6 percent.
“We are doing more analysis to see where the shortfall is,” Rukstad said.
Later in the twice-monthly board meeting, Chief Executive Officer Eric Lewis discussed OMC’s eight strategies for financially viability.
“I think it’s critically important that we look to the future,” Lewis told the board. “I think health care is going to be very challenging in the coming decade.”
Eight strategies
The eight strategies are:
• Improvement to the health care delivery system.
• Continued focus on quality and patient safety.
• Electronic medical records and community connectivity.
• Focus on physician recruitment and retention.
• Advocating for more Medicare and Medicaid funding, with the hospital saying that present funding isn’t adequate.
• Cost management and improved efficiency.
• Volume and revenue growth.
• Grants and donations.
OMC will go live on Tuesday with GE Centricity electronic medical records at its Primary Care and Klahhane clinics in Port Angeles.
“That is a huge deal,” Lewis said.
“We have so many physicians and employees working really hard to make this happen. As we go live, it will be challenging.”
Patients may experience initial slowdowns in the speed of their care, Lewis said.
“I think we’ll soon get up to speed and continue to use these systems to improve the care we deliver,” Lewis said.
OMC is in the process of switching from paper to electronic medical records throughout the Port Angeles hospital and all of the satellite clinics.
Electronic medical records will make OMC eligible for about $7 million in grant money.
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Reporter Rob Ollikainen can be reached at 360-417-3537 or at rob.ollikainen@peninsuladailynews.com.