OHSU Announces Significant Financial Impacts of Tort Cap Loss

01/31/08  Portland, Ore

The recent Oregon Supreme Court ruling on the Oregon Tort Claims Act, which effectively eliminated the tort liability cap for all public bodies in Oregon, has created a significant budget shortfall for Oregon Health & Science University.

The recent Oregon Supreme Court ruling on the Oregon Tort Claims Act, which effectively eliminated the tort liability cap for all public bodies in Oregon, has created a significant budget shortfall for Oregon Health & Science University. The shortfall will affect OHSU’s ability to provide services to Oregonians across the state. Today OHSU President Joe Robertson, M.D., will discuss how the ruling’s $30 million annual impact on OHSU will result in the reduction and loss of certain services and programs. To put the significance of this financial amount in context, the state’s annual support for the university’s operating budget totals $43.3 million.

“These cuts will change OHSU in significant ways. This is a sad day for me personally and for all of us at OHSU,” said Dr. Robertson. “We’ve worried all along that losing the tort cap would hurt public services, and we are now confronted with the full reality of what that means. To cover the cost of higher liability and insurance bills, we must achieve $30 million per year in offsetting financial improvement for the foreseeable future through budget cuts and tuition increases. OHSU had already undertaken a five-year, $114 million cost-cutting drive. The loss of the tort cap more than doubles how much we will have to save.”

As part of the cost-cutting efforts, an estimated 200 to 300 positions will be eliminated. These will take place through program reduction, attrition, voluntary departures and transfers.  Additional changes include:
Closure or restructuring of the Russell Street Dental Clinic which provides dental services for the underserved.

  • Closure or transfer of the rural health clinic in Union, Oregon which serves residents from the surrounding region.
  • Discontinuation of additional community outreach services.
  • A reduction in the School of Science Engineering which will also be merged with the School of Medicine.
  • OHSU will also accelerate the move of the School of Science and Engineering away from the university’s West Campus.
  • The MARCH Wellness Center at South Waterfront will be outsourced or closed.
  • The university will reduce central university services in finance, human resources, administration and other areas.
  • Research centers at OHSU may be unable to absorb their share of the additional costs, which may result in the loss of some centers.
  • A reorganization of an OHSU-initiated statewide health research program. The program may also be slated for closure at a later date.
  • A reduction in class size for the School of Medicine which is a significant issue for Oregon as the state is facing a physician shortage which is expected to worsen.

“These cuts will affect our size but not our excellence,” explained Dr. Robertson. “We are committed to retain faculty and staff who are essential for OHSU to remain a top-tier institution. We also remain committed to maintaining the highest standards in health care, education and research. To lessen the impact on underserved Oregonians, we will work with our external partners where possible to transition services that OHSU must end.”