There is a lot of uncertainty in the country and in the health care industry these days.
In particular, proposed budget cuts at the federal level could have wide-ranging impacts on Medicaid, Medicare and other important programs. Other cuts enacted in the past few months are impacting many of our fellow health care organizations in terms of funding for research and grant-based programs.
Increasingly, community members are reaching out with concern about these changes and asking for my thoughts on the impacts we may experience locally.
We are keeping a close eye on the evolving situation, but so far St. Charles has not experienced direct cuts. We are working with our elected officials to protect what we can at the local level and we are grateful to the Oregon Legislature for moving swiftly this session to renew the provider tax that helps fund Medicaid for one in three Oregonians.
And yet, three out of four patients we serve are covered by Medicare or Medicaid, and those programs chronically underpay providers. Medicaid reimburses hospitals about 70 cents for every dollar of care we provide. Oregon hospitals are struggling financially, with nearly all health systems reporting financial losses in 2024 and additional losses in the first quarter of 2025. With a 0.6% operating margin, St. Charles was barely in the black at the end of last year. We are celebrating this small accomplishment, but we know that a healthy operating margin needs to be closer to 5% long term so we can continue investing in our people, places and programs. Sizeable federal budget cuts will inevitably impact care in our region. It is just too soon and too speculative at this moment to know by how much.
Meanwhile, as Central Oregon continues to grow, St. Charles has a responsibility to also expand the care we provide. This past year, we have invested in new services including gastroenterology, urology, orthopedics, neurosurgery, physiatry and more. And we anticipate more investment will be needed over the next few years to upgrade our facilities to meet the community’s needs. We know our emergency rooms and operating suites are not adequate for today’s population, for example, and we are working to address those issues. But planning for and building new health care facilities takes a significant amount of time and resources – and quite frankly, cuts to our already limited reimbursements won’t help us get there.
So, for now, we are focusing on what we can control: Supporting our more than 5,000 caregivers and ensuring that we continue providing exceptional care. We have a solid long-term plan that focuses on growth — growth that is sustainable, responsible, prudent, and necessary. Because that’s our job as your local, nonprofit, community health system and we are proud to do it.
Thank you, as always, for your ongoing support.
Sincerely,
Steve
