Washington hospital leaders are pleading for help from the state as they're hit with massive financial losses for the third quarter in a row — a deficit they say is due to continued rising costs of labor, supplies, and patients staying for long lengths of time.
Health care systems in the state lost more than $1.6 billion during the first nine months of 2022, threatening service closures and more instances of diverting care, according to a recent survey done by the Washington State Hospital Association. It's the third survey the organization has done this year in an attempt to sound the alarm on growing financial losses in hospitals.
"Losing hospital services is something every Washingtonian should be concerned about," said Cassie Sauer, CEO of the hospital association. "Hospitals are the only place people get care for heart attacks, strokes, trauma, appendicitis, a lot of cancer surgeries and other emergency and acute care needs. When these resources leave a community, it's nearly impossible to get them back."
Health care revenues totaled about $23 billion between January to September, according to results of the survey. Meanwhile, hospitals spent about $12.5 billion on employee wages and benefits, about $10.6 billion on supplies and drugs, and about $1.6 billion on contract staffers — adding up to nearly $24.7 billion in expenses.
This year, hospitals spent more than $2 billion more compared to the same period last year, including over a billion more on travel nurses. The state brought in about 90% more travelers than it did last year, the survey showed. In comparison, the number of hospitals' permanent employees increased by about 1.5%.
Less than 1% of expenses have gone toward hospital executive salaries, said Chelene Whiteaker, the hospital association's senior vice president of government affairs.
"These large losses are putting patient care at risk in many communities throughout the state," Sauer said. "Access to specialized care is threatened by unsustainable financial losses as hospitals are resorting to extraordinary means to close the gaps in their budgets."
In addition, 77 of the 87 acute-care hospitals surveyed had lost more money than they'd earned as of September, said Eric Lewis, the hospital association's chief financial officer.
"More than 50% of these hospitals will be out of cash by the end of 2023 if [they] continue the same negative cash flow," Lewis said. "What this means is they can't pay vendors. They can't meet payroll. And they can't continue to operate."
Hospitals could be forced to make changes and face closures if they don't receive some help from the state, Sauer said.
When Washington's 2023 legislative session gets underway in mid-January, hospital leaders will push lawmakers to significantly increase Medicaid reimbursement rates, up funding for long-term care facilities in need of staffers, advocate for changes in interpretation around the state's guardianship laws and invest in more emergency behavioral health centers, Whiteaker said.
Medicaid reimbursement rates haven't been updated in the state for a couple decades, and are far from what is needed to cover the costs of medical care here, hospital leaders have said. The hospital association supported two Medicaid-funding proposals during this year's legislative session, but no broad rate increases were approved.
In Washington, about 10% to 20% of hospital beds are, at any given time, filled with patients who no longer require hospital support, Whiteaker added. Because many still need some level of care, however, hospitals usually discharge them to a separate long-term care facility where they can continue to recover.
But these types of facilities have been understaffed for months and can't take any more patients, meaning an increasing number of people are finding themselves stuck in a hospital bed longer than necessary. At the same time, hospitals can't use those beds for other patients whose care would bring in more revenue.
"We have been very vocal about the situation with long-term care," she said. "We need long-term care [systems] to function so patients can be discharged and cared for in the right place at the right time."
Hospital leaders from the Olympic Peninsula, Central Washington and Eastern Washington said Tuesday morning their facilities have all felt growing pressure recently, especially since respiratory infections started skyrocketing this fall.
Astria Health, headquartered in the Yakima Valley, started reducing its number of travel nurses this summer to cut costs, said hospital system CEO Brian Gibbons. The result, though, is fewer beds are staffed, he said.
Now, only four of seven ICU beds offered at Astria Sunnyside Hospital — one of the system's two hospitals in Yakima County — are available for patient care. The hospital has 25 beds total.
Astria also recently announced its decision to cut cardiology services, effective this Friday, due to rising costs, Gibbons said. The system previously offered inpatient and outpatient cardiology services, mostly including non-invasive or minimally invasive procedures.
The next closest cardiac services are about 45 miles away, he added.
"We will now be forced to stabilize patients in our emergency department who are having heart attacks, and then move then on to the next hospital," Gibbons said. "It's a low volume program. But I don't like that. It worries me a great deal."
The cut to cardiology services will hopefully "bring Sunnyside's financials back into a positive place," but more closures are likely on their way if the state doesn't offer some help, he said.
In Eastern Washington, community hospitals are transferring care to Providence facilities at about five times the rate they usually do, said Susan Stacey, chief executive for the hospital system's inland northwest region.
"The transfer asks are up across the state and in neighboring states. Everyone is struggling with capacity," Stacey said. "As hospitals close programs, this results in increased requests for care at hospitals that continue to provide those services. The bottleneck is just getting unsustainable."
The same is happening in Port Angeles at Olympic Medical Center, said chief physician officer Dr. Joshua Jones, who added that he and his team "don't see an end in sight."
"The losses around the state are of massive concern to everyone, including legislators who may need these services themselves at some point," Sauer said. "We think there's a solution. But we need help."
