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In Their own words: OHSU and the cutbacks

January 24, 2009

By Oregon Health Science University,

In response to these challenges, OHSU is reducing costs by $30 million to $35 million for the current financial year.

OHSU President Joe Robertson, M.D., M.B.A. today provided an update on OHSU’s efforts to respond to the global economic downturn. The downturn has impacted the university in two major ways: a decline in expected investment earnings and slower than anticipated growth in OHSU Healthcare revenues. In response to these challenges, OHSU is reducing costs by $30 million to $35 million for the current financial year.

“No one can predict the depth or length of the current financial crisis. However, it is clear that OHSU must respond with immediate reductions,” said Dr. Robertson. “Today I explained to OHSU employees that the economic downturn will result in the loss of at least 500 and perhaps as many as 1,000 positions by the end of the current financial year. I shared this news with great sadness as I am fully aware of the human toll of these decisions and the tremendous commitment of our employees to the health and well-being of Oregonians.”

During a campus town hall meeting, Robertson and other OHSU leaders provided a detailed update to employees on the impacts of the global economic downturn and OHSU’s response. These details included:

• Job reductions in the university’s central services departments of approximately 110 to 120 positions. Central services functions include: human resources, facilities, public safety, information technology support, communications, government relations and legal.

• Ongoing reductions in the School of Medicine totaling $8 million. These reductions will include significant job eliminations. However, exact figures are not available at this time.

• Workforce reductions in OHSU Hospital of approximately 140 positions. These positions are being reduced because the hospital anticipated 5 percent growth this year, but has instead seen its volume rise by only 1 percent.

• A reduction in University Pension Plan retirement contribution for faculty and unclassified employees from 12 percent to 10 percent, effective Jan. 1, 2009 for new faculty and employees and July 1, 2009 for current faculty and employees. The University Pension Plan is one of two retirement plans that OHSU employees can choose. The other is PERS.

• The use of $20 million in donor funds where available to preserve and advance missions in accordance with original donor intent.

“OHSU is fortunate to have earned the trust of many donors who have over the years provided unrestricted or discretionary support for OHSU and our key leaders,” Dr. Robertson said. “We are grateful that donors continue to support the important work we do to improve the health of Oregonians.”

In December, OHSU announced a university hiring freeze, a university and OHSU Healthcare salary freeze, the postponement of a major expansion of the Kohler Pavilion and other reductions in capital spending. OHSU’s top executives voluntarily decided to forgo 20 percent of their base pay and all of their incentive pay.

Dr. Robertson said that OHSU will manage through this downturn. “Despite these disheartening losses, OHSU will continue to be the premier research institution in the state, offer the best care for the most difficult cases and train the healthcare professionals we need for the future. OHSU will work to improve the health of Oregonians and continue to be an important economic engine for the state.   When the nation and our state emerge from this recession OHSU will re-invest in our programs, faculty, staff and infrastructure.”

  
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