Oregon Health & Science University (OHSU) is confronting significant financial difficulties as it prepares to acquire its long-standing competitor, Legacy Health. Recent reports indicate a mounting deficit of $71.5 million over the first nine months of the fiscal year, projecting a potential $95 million shortfall by June. This financial strain coincides with OHSU's ambitious plan to invest over a billion dollars in upgrading Legacy’s infrastructure over the next decade. To mitigate these losses, OHSU aims to cut expenses and boost revenue through enhanced medical services, while carefully managing employee compensation.

In response to these challenges, OHSU leaders have devised an aggressive strategy to halve the losses within the next fiscal year. CFO Lawrence Furnstahl outlined plans to manage a projected $45 million deficit for 2026, maintaining the institution’s operating margin below 1%. Measures include reducing capital projects and tapping into cash reserves originally set aside for future investments. The university attributes its financial struggles to various factors, including insufficient insurance reimbursements, prolonged hospital stays, and increased staffing costs due to legislative mandates on nurse-to-patient ratios.

Dr. Nathan Selden, Dean of OHSU’s School of Medicine, highlighted ongoing and planned construction projects aimed at enhancing cancer treatment capabilities. However, certain expansions, such as those for high-risk pregnancy care, will be postponed. Union-represented workers, including nurses and advanced practice providers, urged OHSU to prioritize primary care investments over expanding hospital capacity. Concerns were also raised about federal funding cuts under recent budget proposals, which could further destabilize OHSU’s finances, particularly impacting research endeavors.

Peter Barr-Gillespie, OHSU’s Chief Research Officer, expressed worries about potential reductions in indirect funding from federal agencies like the NIH. Additionally, there are uncertainties regarding the future of the Oregon National Primate Research Center amidst political pressures for its closure. Despite these pressing issues, discussions surrounding the planned Legacy merger remained limited during recent meetings, with interim President Steve Stadum providing only brief updates amid regulatory considerations.

OHSU's financial recovery hinges on balancing cost-cutting measures with strategic investments in critical healthcare services. While addressing immediate deficits, the university must also navigate potential shifts in federal funding priorities and advocate for sustainable support for its vital research and patient care missions. These efforts underscore OHSU's commitment to maintaining excellence amidst challenging circumstances, ensuring continued contributions to both local and national health initiatives.