OHSU President Shereef Elnahal laid out key parts of his vision Wednesday for improving the institution’s financial performance.

OHSU, one of the state’s largest employers and its only academic medical center, has been operating in the red for several years running.

Elnahal has a record of stabilizing financially troubled institutions and has convinced at least two influential Oregonians that he can do the same for OHSU.

At a press conference Wednesday, he told reporters that building a case for how OHSU will turn around its bottom line was key to securing a record-breaking $2 billion commitment from Phil and Penny Knight last month.

“They want OHSU to be a sustainable organization overall, so that their vision for the best cancer care experience in America can not only open, but operate well into the future,” he said. “We do not get saved by that donation financially. In fact, we have to prove ourselves financially so that the impact of that donation is maximized.”

In the 2025 fiscal year, OHSU yet again spent more than it brought in, losing approximately $133 million on its operations.

With the exception of some outlier budget items, the reason for the losses is relatively simple, according to materials prepared for a board meeting Friday. OHSU’s core revenue grew by 6%, while its salary and benefit costs grew by 10%.

Escalating supply chain and personnel costs are affecting every academic health center in the country, Enahal said.

OHSU is pursuing three high-level strategies to close the gap. The first – a strategy championed by the previous president and board – is adding capacity in specialty services like cancer care that meet a community need and also bring in more money than OHSU spends on them.

To that end, a new inpatient building opening on the Marquam Hill campus, known as the Vista Pavilion, will now be dedicated entirely to cancer care, Elnahal said.

The Knights’ gift will help OHSU cover outstanding capital costs and finish the project more quickly. The building is slated to open March 31 with 128 beds. As OHSU builds its capacity over time, the pavilion could expand to serve up to 200 cancer patients. The dedicated new resources for cancer patients, according to Elnahal, will have a ripple effect that will help OHSU alleviate crowding and waitlists in some other departments.

A second strategy is pushing for higher reimbursement rates from commercial payers. Elnahal said OHSU had successfully negotiated better rates from the insurance giant UnitedHealthcare and is in the process of negotiating with Kaiser and Regence.

“We have standing to make a good argument to be reimbursed for the complexity of care that we’re offering in a way that we’re not right now,” he said.

Finally, Elnahal said, he hopes to avoid another round of layoffs by slowing workforce growth and being more disciplined about making new hires. Limiting hiring was also a goal in last year’s budget. OHSU hit its target of keeping the growth in new, full-time equivalent positions below 2%. That achievement was ultimately offset by the growth in salaries and benefits.

Even as OHSU tries to stem its current losses, policy change in Washington, D.C. could cut even more deeply into the institution’s revenue.

HR1, the tax cut bill passed by Congress this summer, has set the stage for deep future cuts to Medicaid. OHSU is particularly vulnerable to two aspects of the bill: cuts to state-directed payments and new eligibility requirements that the state has estimated could lead to more than 100,000 more uninsured Oregonians.

Still, Elnahal said he’s optimistic about the future.

A draft appropriations bill in Congress restores funding for the National Institutes of Health that the President proposed cutting in his budget, which could ensure support for research at OHSU that relies heavily on NIH grants.

He spent the past month meeting people across OHSU’s clinical care, education and science teams, he said. He’d joined doctors’ rounds in the Knight Cancer Center, the neurosurgery department at Doernbecher Children’s hospital and the emergency department.

He called OHSU an extraordinary place that he’d known about since applying to medical school, and said it already provides some of the best care available on the West Coast.

“I think the sky is the limit for a place like this.”

News Source : https://www.opb.org/article/2025/09/24/ohsu-oregon-health-science-university-president-layoffs-budget-finances/