Washington hospitals will 'cease to exist' if losses continue, leaders say

Washington hospitals are in dire financial straits. Service cuts and closures are inevitable if such losses continue, The News Tribune reported March 22. 

On March 21, Cassie Sauer, president and CEO of the Washington State Hospital Association, joined health system leaders for a media briefing. The state's hospitals are facing an "unsustainable financial situation," Ms. Sauer said. 

Leaders presented the hospital association's 2022 financial survey of 81 acute care hospitals in Washington, representing 98 percent of available acute care beds. 

In 2022, the hospitals reported a total net loss of more than $2.7 billion, compared to a $1.2 billion loss in 2021. Their net operating loss last year was $2.1 billion, compared to $742 million in 2021. 

"The fact that 2022 is worse is quite alarming," Ms. Sauer noted. "We're very concerned that access to this specialized care, the highest level of care, and in many cases, the life-saving care is threatened by unsustainable financial losses as hospitals are resorting to extraordinary means to close the gaps in their budgets."

The hospital association attributes these losses in part to rising costs. Hospitals saw a 120 percent increase in agency traveler costs, 6 percent rise in employee wages and benefits and 6 percent increase in cost of medication, supplies and other expenses. 

Additionally, low Medicaid reimbursement rates are creating trouble for hospitals, according to WSHA CFO Eric Lewis. 

"The reasons for these massive losses are many, including low Medicaid reimbursement as urban hospitals have not received a rate increase in 20 years, and some urban hospitals are paid less than 50 percent of costs," Mr. Lewis said. 

The hospitals are seeking legislation that would bring Medicaid reimbursements up to Medicare rates. Even if the law is passed, leaders expect $1 billion in losses to remain uncovered. 

"We can't continue to do it at a loss, because ultimately, we'll cease to exist if these losses continue," said Chelene Whiteaker, WSHA's senior vice president of government affairs.

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