Washington State Hospitals Reeling Financially

In the first quarter of 2022 alone, Washington state hospitals and health systems reporting losing nearly $1 billion combined, with a negative 10 percent operating margin, according to the state hospital association.

Susan Stacey, chief executive for Providence Inland Northwest, recently told KXLY.Com in Spokane that she been in healthcare for nearly 40 years and has never seen a financial crisis in healthcare like this. “We are dealing with a workforce shortage, high salaries — our wages are higher than ever before – like many industries. And then we also have travelers and temporary staff that are at a significantly increased cost than we’ve had.”

In a July 22 article on the Washington State Hospital Association website, Cassie Sauer, president and CEO of the organization, outlined some reasons for these significant hospital losses:

• Low reimbursement rates from government payers such as Medicare and Medicaid, which use fixed reimbursement models. For urban hospitals, Medicaid reimbursement rates have not increased in more than 20 years. In the first quarter of 2022, Medicaid payments for some urban hospitals covered just 42 percent of the costs of delivering care for patients with Medicaid.

• An increase in employee compensation of 10 percent, while the number of employees remained stagnant. In addition, temporary labor spending increased 200 percent due to the higher number of acutely ill patients and workforce shortages.

• The continually rising number of difficult-to-discharge patients who no longer need to remain in the hospital but are unable to secure placement in nursing homes or post-acute care facilities. This creates an extremely costly situation that threatens patient access across all inpatient services.  Providence’s Stacey said: “Just here in Spokane at Sacred Heart and Holy Family, we are close to 100 patients who are sitting in a hospital bed, who do not need hospital-level care.”

Sauer noted that hospitals expect these significant financial losses to continue in the final six months of 2022, and for far longer if they are not addressed. “Hospitals need help,” she wrote. “We are asking the state government to act now and during the 2023 legislative session to enact solutions to this crisis.”

Here are some steps that she says need to be taken:

• Hospitals need the state government to help move patients ready for discharge into appropriate post-acute or long-term care settings.
• In the 2023 legislative session, WSHA will work with legislators to increase Medicaid rates for hospitals.
• WHSA will lobby for funding to support post-acute care providers to ensure the state’s healthcare system flows as it should and provides people with access to care that they need in an appropriate setting – rather than becoming stuck in hospitals without the need for specialized care provided by hospitals.
• WHSA will look for solutions for behavioral health patients in crisis to allow intervention prior to an emergency department visit.