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Washington hospitals continue to struggle financially

Courtesy Providence Health/Sacred Heart Medical Center
The CEO for Providence in eastern Washington says the company has put off all capital projects for the time being.

A new survey shows the facilities have collectively lost more than $1.6 billion during the first three quarters of 2022.

Washington’s hospitals, as a whole, are experiencing a third consecutive difficult financial year.

The state hospital association reported on Tuesday that 77 of 87 hospitals in Washington were losing money during the first nine months of 2022. Eric Lewis, the organization’s chief financial officer, told reporters the hospitals are more than $1.6 billion dollars in the red this year. They’ve also lost nearly a billion from their investment portfolios.

“What this means is they can’t pay their vendors. They can’t meet payroll and they can’t continue to operate. Hospitals will need to make changes in order to be able to continue to operate,” he said.

Hospital Association CEO Cassie Sauer says the reasons for the financial woes are many and complex. They include labor shortages and the high cost of paying the employees they do have, many of them traveling nurses who can command much higher pay than in-house employees. There’s the inflation that drives up the cost of running complicated facilities. Sauer says hospitals continue to lose money caring for a growing number of patients enrolled in government-funded health programs, for which the government doesn’t provide the full cost of care. There’s also the problem of hospitals having to provide room and board for patients who were once sick, but are now healthy, but have nowhere they can be safely discharged.

“This is really at a time when demand for health care services in our state is just exceptionally high,” Sauer said. “We’re experiencing so many patients who had delayed care during the pandemic, who are sicker and need more complex care, all the respiratory challenges, two years of no flu and RSV. We now have essentially three years worth of patients coming to our hospitals with respiratory challenges.”

She says the association will ask the legislature for help when it convenes next month. It will ask the state to increase the amount of money it pays hospitals to care for patients who are on Medicaid. It’s also asking the state for help in finding rehab and convalescent facilities for hospitalized patients who are healthy but have nowhere else to go. Some of those people have occupied hospital beds for months.

Some hospitals aren’t waiting for help from the state and are cutting non-emergency services. Brian Gibbons, the CEO of Astria Health in the Yakima Valley, says the company has reduced its capacity in one intensive care unit and terminated an agreement with a cardiology practice to care for patients with heart problems. In Spokane, Sacred Heart has put all of its capital projects on hold, says Susan Stacey, the Providence CEO for Spokane and Colville.

“This includes regular maintenance, but also investing in technology and increasing our ability to care efficiently for patients," Stacey said.

She says Providence had planned to remodel a surgical suite to upgrade equipment and make it possible to handle more patients. But that project has been postponed.

Sauer from the hospital association says, unless the state steps in with some relief, the forecast for 2023 is for more of the same. And for some facilities, especially in rural areas, she says it may be too late.

Doug Nadvornick has spent most of his 30+-year radio career at Spokane Public Radio and filled a variety of positions. He is currently the program director and news director. Through the years, he has also been the local Morning Edition and All Things Considered host (not at the same time). He served as the Inland Northwest correspondent for the Northwest News Network, based in Coeur d’Alene. He created the original program grid for KSFC. He has also served for several years as a board member for Public Media Journalists Association. During his years away from SPR, he worked at The Pacific Northwest Inlander, Washington State University in Spokane and KXLY Radio.