The board of directors for Portland-based Oregon Health & Science University has approved a 2025 fiscal year budget that moves forward plans to cut more than 500 positions, according to Oregon Public Broadcasting.
Board members approved the budget June 28 as OHSU works to address financial challenges.
"The actions that we're taking now are intended to help us better respond to the needs of our patients to better serve our missions," Danny Jacobs, MD, president of OHSU, said at the June 28 meeting, according to OPB. "That includes research and education and to improve our ability to adapt to the challenges of our time — but what we're doing is very heavy and very difficult."
OHSU's fiscal year 2024 operating loss through May (11 months) is $64 million, and its approved budget for next fiscal year factors in a $25 million operating loss. OHSU has notified state officials that it is not renewing the contract of 142 employees whose jobs are being permanently eliminated as part of its annual renewal process. Overall, OHSU anticipates that reductions in force — combined with annual non-renewal notices that have been issued — will amount to more than 500 layoffs (between 2% and 3% of OHSU's workforce) in a 90-day period.
The budget approval follows OHSU and Portland-based Legacy Health signing a binding, definitive agreement to come together as one health system under OHSU Health. In his remarks during the June 28 meeting, Dr. Jacobs reaffirmed the commitment to the deal, an OHSU spokesperson told Becker's.
Dr. Jacobs said previously: "The capital investment in Legacy Health represents a strategic expansion designed to enhance our capacity to serve the health and wellness needs of people across the Pacific Northwest, and will be financed by borrowing with 30-year bonds. These capital dollars cannot be used to close gaps in our fiscal year 2025 OHSU budget or to pay our members. The OHSU Strategic Alignment and budgetary work would be necessary with or without the Legacy Health integration."
Meanwhile, members of the American Federation of State, County and Municipal Employees Local 328 and the Oregon Nurses Association have criticized the job cuts at OHSU, according to Willamette Week. When asked whether reduced salaries for high-earning positions would be effective, CFO Lawrence Furnstahl rebuffed that strategy.
"While we recognize that OHSU is facing significant budget challenges, the process to improve our financial position while preserving high quality work is flawed," Amy Miller Juve, EdD, faculty senate president and professor of anesthesiology and perioperative medicine, told board members, according to the publication. "Decisions have been top down, lacked appropriate planning, and quite frankly, feel inhumane. The work underway is titled 'Strategic Alignment.' However, we struggle to understand the strategy or to what we are aligning, other than to cut expenses."
A video of the full June 28 meeting is available here.