OHSU Cutting Employee Salaries Due To Major Loss In Revenue

By Kristian Foden-Vencil (OPB)
Portland, Ore. April 23, 2020 7 p.m.

Oregon Health & Science University is reducing salaries by about 10% due a major loss in revenue related to the coronavirus pandemic.

The Portland-based teaching hospital says the coronavirus is expected to result in losses of up to $1.4 billion over the next two-and-a-half years.


The cuts come as Oregon has managed to flatten the coronavirus curve, keeping people out of the hospital.

Related: Gov. Kate Brown Unveils Plan For Lifting Restrictions On Hospitals Starting Next Month

That’s good for the state, but not good for hospital bottom lines. Also, patients who might have normally sought care have stayed away, sensing that staff need to concentrate on the virus.

Oregon Gov. Kate Brown had also directed hospitals to cease elective surgery procedures but announced Thursday they could begin May 1.

But that means patient care is down 40% at OHSU. In a normal month, it might have about 480 patients. But last month that was down to 160 patients. And only 10 of them had the virus.


OHSU President Danny Jacobs said that means they now have to make deep cuts – and those with bigger salaries face deeper reductions.

“This is about a 40% reduction in total compensation for me,” he said. “So we’re trying to spread the burden as equitably as possible and keep as many people working as possible.”

Related: How Are Oregon Hospitals Handling The Coronavirus Pandemic?

Other executives face salary cuts in the range of 35% to 40%. Staff making less than $50,000 a year will not see salary reductions.

OHSU chief financial officer Lawrence Furnstahl said OHSU doesn’t want to get caught in a spiral of debt.

“Our objective is to be ahead of the curve. So that if things improve faster rather than slower, we can loosen some of these reductions. And not get caught up in a spiral if we can avoid it,” said Furnstahl.

Some of Oregon’s rural hospitals have seen even fewer patients than OHSU. Some have seen reductions of up to 70%.

The federal CARES Act includes money for hospitals. But Oregon hospitals receive less than some states because it has a higher percentage of Medicare Advantage patients.

Last month, OHSU said it would maintain a full workforce with full pay and benefits through June 30. The salary reductions go into effect on July 1.

The health system has established a $1 million hardship fund for employees facing adversity because of COVID-19.