WA hospitals face “unstable financial situation”

Oct 5, 2022, 10:10 AM

Emergency Room...

There is a shortage of healthcare workers in Kitsap County even in emergency rooms. (Getty Images)

(Getty Images)

State hospitals have lost $1.75 billion dollars in the first six months of 2022, according to the Washington State Hospital Association (WSHA).

“The results are clear and incredibly concerning,” WSHA President and CEO Cassie Sauer said. “[Hospitals] continue to face an unstable financial situation.”

Multiple issues have led to the shortfall

After years of struggling with COVID-19 and overcrowding, state hospitals are “dealing with low Medicaid reimbursement, labor shortages, patient costs higher than reimbursement, and high inflation,” WSHA chief financial officer Eric Lewis outlined. He said that a 12% loss is “unsustainable,” and at that rate, 50% of hospitals will be out of cash by the end of 2023.

The figures are part of the hospital financial survey released at a meeting this week. Lewis said 74 of the 85 hospitals in the survey are experiencing negative cash flow.

“Washingtonians rely on hospitals to be there for their heart attacks, strokes, trauma, appendicitis, cancer, and acute care needs, and hospitals are the only place that provide care to these patients,” Sauer said.

Hospitals face revenue shortfall in early 2022 

An unexpected position

Mike Marsh, Overlake Medical Center CEO, said he never thought hospitals would be in this position. “Of course, we could cut costs… (but that) usually amounts to cutting services or staff.” That could make a bad situation, even worse, Marsh emphasized.

WSHA said hospitals will need government assistance to recover.

“We are very much in need of the state legislature’s help. This year we need Medicaid payments to increase significantly,” WSHA senior vice president Chelene Whiteaker said. “WSHA will be requesting hospital Medicaid payments to increase by more than a billion dollars.” Even if that happens, Whiteaker claimed it won’t cover the shortfall.

“Our big concern is that access to… specialized care is really threatened by these unsustainable financial losses,” Sauer said.

Marsh outlined the key issue, specifically citing the struggles to get enough staff for the patient load they are experiencing.

“Prior to this historic staff crisis, a 2 to 3% operating margin was normal for health systems. In other words, not much room for error,” Marsh said.


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