Leader of OHSU Union Cries Foul on Job Cuts as Other Workers Get Bonuses

The leader of one of the nine unions representing workers at Oregon Health & Science University chided the academic medical center for warning of layoffs just months after president Danny Jacobs got a bump in retirement benefits and non-union staff took home bonuses untethered to performance.

“It’s outrageous and immoral that OHSU is, on one hand, planning to lay off 500 hard-working people and reduce patient care, while writing checks” to executives and boosting Jacobs’ retirement pay, Jennie Olson, president of American Federation of State, County and Municipal Employees Local 328, said in a statement. “OHSU needs to prioritize patients and people instead of lining the pockets of people in ivory towers.”

The university sent an email to staff late Thursday saying it would cut at least 500 workers in the next three months as costs continue to outstrip revenue, as they have since the pandemic. OHSU’s press office didn’t return an email sent late Thursday seeking comment on the layoffs.

OHSU has been spending with one hand and cutting with the other, irking union members, who make up about two-thirds of the university’s staff. Late last year, Jacobs handed out $15 million in “President’s Recognition Awards” to 2,000 of the university’s 20,000 workers. The bonuses were independent of performance and went only to non-union employees.

Around the same time, OHSU chairman Wayne Monfries agreed to deposit an extra $350,000 per year in Jacobs’ retirement account as part of a two-year contract extension starting July 1.

Another recent expenditure: In April, OHSU paid $17.7 million for the defaulted Crossing at First complex just south of downtown Portland to “support our ability to grow our capacity.”

The biggest expenditure by far, though, will come if OHSU is successful in buying crosstown rival Legacy Health. OHSU signed a letter of intent to do the deal in August. On May 30, Monfries and Jacobs said the university had decided to sign a “binding, definitive agreement” to buy Legacy. If the purchase is approved by regulators, OHSU plans to spend $1 billion over 10 years to integrate and improve the merged entity.

The Oregon Nurses Association, which represents 4,500 workers at OHSU, said cutting jobs while pursuing a costly acquisition makes no sense. “OHSU needs to get its priorities straight and focus on expanding services to our communities, not cutting the jobs and benefits of people who actually make our healthcare system work,” the union said in a statement.

In an email about the layoffs yesterday, Jacobs and his top lieutenants sought to explain how OHSU could afford the Legacy purchase but couldn’t afford to keep all its staff.

“The capital investment in Legacy Health represents a strategic expansion designed to enhance our capacity to serve the health and wellness needs of people across the Pacific Northwest, and will be financed by borrowing with 30-year bonds,” OHSU leaders said in the email. “These capital dollars cannot be used to close gaps in our fiscal year 2025 OHSU budget or to pay our members.”

In a “Leader Essentials” email to staff this week, OHSU defended Jacobs’ performance as CEO, and Monfries’ decision, made unilaterally, to boost his retirement account by $700,000 over two years. OHSU uses the Leader Essentials missives to answer questions from faculty and staff.

“Concern was expressed about the news that President Jacobs received a $350,000 annual retirement increase amid budget cuts, questioning the basis for this compensation,” the email says. “Prior to the latest contract, Dr. Jacobs’ OHSU compensation was below market for several years.”

Jacobs became OHSU’s fifth-ever president in 2018. Most of his tenure has been spent under the pall of the pandemic, the email said. “The fact that OHSU has managed to achieve what it has in spite of the challenges—financially, culturally and operationally—speaks to the strength of Dr. Jacobs’ leadership.”

OHSU is “going through a period of transformation” in part because of the pandemic, but also “in response to some deep work to improve culture and prepare for a strong future that puts people first.”

That work suffered a setback late last month when OHSU parted ways with chief people officer Qiana Williams. During her 18-month stint, Williams looked past Oregon and hired most of her top HR brass from OhioHealth, her old employer. Many of those executives worked remotely from the Buckeye State. Last month, Williams told a group of employees that OHSU had a “culture of complaint.”