Preliminary figures showed Olympic Medical Center losing more than $10.3 million during the course of 2024, although it was significantly less than a loss of nearly $26 million the previous year.
On Wednesday, May 7 the Olympic Medical Center board of commissioners heard the first report on the system’s financial status since December.
Chief Financial Officer Lorraine Cannon said technical issues with the implementation of new operations management software that began last fall had disrupted and delayed the reporting.
“We thought it would be done much earlier, but it is getting better,” Cannon said. “This is going to help us going forward, and it’s a better tool than the previous one. It just needs to be fine-tuned.”
Cannon cautioned that the initial reports for 2024 were drafts and not final. She and her team are still working on finalizing numbers for the first quarter of 2025.
The preliminary numbers for 2024 net income showed OMC losing $10.356 million — more than the $967,000 loss it had anticipated but less than half the $25.982 million it lost in 2023.
While it continued to run a deficit in 2024, OMC’s operating margin did improve, dropping from -10.9 percent in 2023 to -3.9 percent. Its 2024 operating margin also was better than 2022, when it was -6.3 percent.
OMC’s cash reserves, which have been in a steady decline from the last quarter of 2022, when it had 88 days of cash on hand, took a slight tick upward to 32 days in the third quarter of 2024 after hitting a low of 28 days in the third quarter.
In December, OMC showed a net income of $57,000 when it was budgeted to lose $543,000.
Commissioner Tom Oblak said he understood there are inherent problems in rolling out any new system, but the lack of information had given some members of the public the impression that OMC was purposefully avoiding disclosure.
“With the absence of reports and that uncertainty, there’s a lot of suspicion in the community,” Oblak said.
CEO Darryl Wolfe said the board would be presented with financial reports for 2025 as the months-end close processes are completed, as well as statistics about services such as emergency department visits and average daily bed numbers.
As OMC sought to reverse the significant financial challenges it faced, it also was reluctantly considering what Wolfe called “Option Z”: becoming a critical access hospital like Jefferson Healthcare in Port Townsend.
“I hate Option Z,” he said.
OMC needs to take a hard look at options for remaining independent if the partnership exploration process does not yield any good options, Wolfe said. Seeking a designation as a critical access hospital is one option.
Among the changes OMC would have to make to qualify for critical access hospital designation would be shrinking from 67 beds to 25. It also may have to close its Sequim campus, which would violate the distance requirement of being within 35 miles of another hospital (Port Townsend).
The priorities for any decision about sustaining OMC’s long-term future are jobs, services and access, he said.
“I’d rather see us stay the same size or grow,” Wolfe said. “I’m optimistic we can figure this out. It’s the world we live in, and we’re just trying to do our best to navigate it.”
The board reiterated its intention and reasons for maintaining the confidentiality of discussions and information as it has explored the possibility of partnering with another health system.
Commissioner John Nutter said that talk about “secret negotiations” and other rumors that spread misinformation were not helpful. While he understands people are anxious to know more about the process, he urged patience.
“There are no negotiations,” Nutter said. “We are in the learn-and-see phase, and we will do what is in the best interest of the community.
“Once we have a list [of potential partners], then we can start engaging with the public.”
Three board seats are open on the Aug. 5 primary ballot. After 35 years on the board, Jean Hordyk plans to step down as a commissioner. Carleen Bensen, Tara Coffin and Laurie Force are vying for her Position 4 seat. Incumbent board president Ann Henninger will face Gerald Stephanz for Position 1 commissioner.
OMC commissioner is a non-partisan six-year position. However, the contest for Position 7 is for the remaining two years of former Commissioner Phyllis Bernard’s unexpired term that runs through Dec. 31, 2027. Penney Sanders, who was appointed by the board in March to fill the vacancy created by Bernard’s departure, is running as the incumbent. She is being challenging by Mic Sager.
At its Feb. 5 meeting, the board voted to dissolve Clallam County Public Hospital District No. 2 subdistricts, so commissioners are no longer required to live within specific boundaries, making them all at-large positions. (Carried 4-2; Jean and Oblak voted against.)
