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Oregon Health & Science University says it lost $133 million in the fiscal year that ended in June, far more than it had projected: “That’s a lot,” new president Dr. Shereef Elnahal told staff this week at an OHSU town hall where, in a congenial manner, he discussed the dour financial picture. “We have a systemic problem here, folks,” he said.
Reports of skyrocketing expenses are sounding across the U.S. healthcare system. But Elnahal said OHSU stands out. Presenting slides from a stage Monday, he said OHSU’s operating margins—revenues minus expenses—in recent years ranked quite low among comparable health institutions.
OHSU, he noted, is not a for-profit company, but the trajectory isn’t sustainable.
Since 2019, Elnahal said, OHSU core revenues increased 6.4% annually, while core expenses climbed 9.1%—largely driven by salary and benefit costs, which rose 10.5% annually.
Going forward, he said, such a shortfall would make it harder for OHSU to reinvest in its people or facilities. Elnahal, who started in the top job at the major Oregon medical institution just last month, proposed to mend the situation through a “culture of shared financial responsibility.”
He said he wants to tightly control administrative cost and staff growth, while growing in strategic areas, like cancer care, while also avoiding layoffs. “We can get through this without another reduction in force. It is totally possible,” Elnahal said. “But in order for us to do that, we have to take joint ownership now of this issue, and plan and execute together.”
In a phone interview, Jennie Olson, who leads AFSCME Local 328, the largest worker union at OHSU, said she couldn’t help but note the talk’s timing, smack in the middle of negotiations for a new labor contract. “Every single time,” she says, that union member compensation is in question, highly-paid university leadership comes forth with talk of dire financial numbers and calls for everyone to do less with more and stand together for the cause. “That is the same thing that we’ve always heard,” she says.
Olson does grant that Elnahal presents well. He has expressed a collaborative vision and acknowledged the value of unions, including, she said in his call to her Friday morning, where he gave her a heads up about the coming financial talk.
“That was a total breath of fresh air and I told him so,” she says, adding that Elnhal’s presentation itself was different than any she had seen at OHSU before: “It has that TED talk shine to it, he’s walking around, he has accessible Power Points” that managed to present financial information in a comprehensible manner, she says. But at the end of the day, she adds, ”I have yet to see something new, beyond the revamp or repackaging of this same message over and over again.”
A video of the Elnhal’s talk shows him holding forth, glowing about the high-caliber work being done at OHSU even as, clicker in hand, he shows different graphical expressions of the money shortage. One, he said, is the rapid deterioration of the institution’s “cash on hand,” which has declined from 227 day’s-worth of funds in 2020 to 125 day’s-worth in 2025, meaning there is less money to handle shortfalls or unanticipated capital needs, and that its harder to get favorable terms of loans by which to invest in the future.
Given budget constraints in Salem and leadership in DC, government help can not be expected or assumed, Elnahal said. Donors might help, but only to a degree.
In a follow up email to OHSU community after his talk, he noted that the talk of financial losses might seem contradictory given the recent $2 billion pledge from Phil and Penny Knight to the OHSU Knight Cancer Institute: But that money, he wrote, was “earmarked for specific investments related to a major expansion of cancer care—it is not a bailout of our current financial state.”
