While St. Charles and other health systems are feeling the relief of fewer COVID-19 patients these days, we are also continuing to navigate a serious set of challenges that are the direct result of the pandemic.

In 2021, St. Charles Health System lost $16.4 million due to direct impacts from COVID-19. Even when we include the COVID-relief funding we received from the federal government, we ended the year with a negative operating margin for the first time since the financial crisis of 2008. Having a positive operating margin is critical, as it allows us to re-invest in our equipment, facilities and training for our staff.

There are two primary issues driving these challenges:

  • Inpatient and outpatient surgical volume – which we rely on for a large portion of our revenue – was 29.2% lower than expected in 2021 because of a lack of bed capacity and staff to care for patients after surgery. These limitations were due at least in part to the high number of COVID-19 patients in our facilities.
  • Our labor costs have skyrocketed as many health care workers have left the profession due to burnout. We spent nearly $70 million on contract labor in 2021, which is up from about $12.7 million in 2020. We are grateful that about $31 million of that cost was covered by the state of Oregon, but we are no longer receiving that funding and must now cover all labor expenses on our own.

The pandemic has also exacerbated problems within the health care system that existed previously. For years, the nation hasn’t produced enough health care professionals to replace those who are retiring. We know that additional behavioral health and skilled nursing services are critical, yet the infrastructure is not there to handle the current volume of patients. This means hospitalized patients often stay with us longer than necessary because beds aren’t available at facilities with a lower and less expensive level of care.

Hospitals are the safety net that catches people when they need these types of services and can’t receive them in other places. Yet, the holes in our net keep getting wider and more difficult to fill.

We are working vigorously to address these problems. Our voluntary turnover rate has decreased to 1.4% in March and thanks to an aggressive recruiting effort, our number of open positions is the lowest it has been in many months. We currently have 792 open positions and 232 candidates in the process of being hired. In addition, St. Charles has launched several programs to train our own health care workforce including a nurse residency program, a certified nursing assistant training program and a medical assistant training program.

We are actively implementing ideas to increase revenue and reduce expenses with a goal of minimizing the impact to our workforce and the services we provide.

I have the utmost confidence in our incredible team of caregivers. We will get through this next phase of the pandemic just as we have the past two years – by working together.


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