Financial losses affect patient care at Washington hospitals – State of Reform

Washington hospitals are struggling to meet financial challenges that impact patient care.

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Washington State Hospital Association (WSHA) staff released the results of its third-quarter financial survey of hospitals at a press conference on Tuesday. WSHA chief financial officer Eric Lewis said total hospital operating expenses rose 10% in the first nine months of 2022 compared to 2021, while revenue rose just 4% .

“These higher costs were driven by significantly increased costs for personnel, energy, supplies and medications,” Lewis said.

Compensation for hospital workers rose 8% in the first nine months of 2022 compared to 2021, while the number of hospital workers rose 1.5%, Lewis said. Expenditure on temporary labor increased by 199%.

“Many staff members were sick from COVID, and there were more critically ill patients in hospitals,” Lewis said. “Hospitals used 90% overtime for temporary staff.”

Hospitals reported a net operating loss of $1.66 billion in the first nine months of 2022, representing an operating margin of -7%, Lewis said. In 2021, their net operating loss was -1%.

WSHA CEO Cassie Sauer said financial losses at hospitals are impacting care.

“Access to specialist care is threatened by financial losses,” Sauer said. “Some hospitals are reducing services. Without action, we could actually see hospital closures. This is at a time when the demand for health services in our state is exceptionally high. We meet so many patients whose care has been delayed during the pandemic who are sicker and need more complex care. »

Hospital services are also in high demand due to the spread of respiratory viruses and mental health issues, Sauer said. But hospitals are struggling to provide services as they face financial difficulties. Low Medicaid reimbursement rates contribute to the problem.

“Our state’s urban hospitals haven’t received a Medicaid rate increase in over 20 years,” Sauer said. “This is at a time when the state has massively expanded Medicaid to cover hundreds of thousands more people. Hospitals are essentially subsidizing the state’s Medicaid program. Some city hospitals are being paid less than 50% of the cost of care for Medicaid patients as they see their number of Medicaid patients increase.

Susan Stacey, chief executive of Providence Inland Northwest Washington, said hospital expenses rose nearly 8% in the first nine months of 2022, while revenue rose just over 1%. . This resulted in a $60 million deterioration in operating losses, which stalled Providence’s plans to ramp up clinical services.

“We plan to expand the physical space of the clinics so that we can have primary care offices and have more primary care clinics in our community,” Stacey said. “But at this stage, with the capital freeze, we are not in a position to do that at the moment. And that ultimately creates a void in our care-delaying community.

Chelene Whiteaker, WSHA’s senior vice president of government affairs, said the WSHA plans to ask the legislature to dramatically increase Medicaid payments to hospitals in the next legislative session, which begins in January.

“WSHA is going to have a proposal for the legislature that will maximize federal funding and bring Medicaid payments to hospitals to at least Medicare levels,” Whiteaker said. “Our proposal would increase hospital payments to approximately 76% of the cost of providing care. This still leaves a large Medicaid shortfall—the difference between payments and the cost of care—but that would significantly reduce the gap we see.

Hospitals are also struggling to accommodate patients who are ready to be discharged but are unable to secure placement in a nursing home or other post-acute care facility. At least ten to 20 percent of hospital beds in the state are occupied by patients who no longer need to be hospitalized at some point, Whiteaker said.

“So we’re asking the legislature to consider solutions in this area, including additional funding to place complex patients who have traumatic brain injury or people with developmental disabilities,” Whiteaker said.

Dr Joshua Jones, chief medical officer at the Olympic Medical Center in Port Angeles, said finding alternative placement for patients was a difficult issue at his 67-bed hospital.

“At any given time, perhaps 10-15% of these are cared for by people who would be better served in a skilled nursing facility or other lower level of care. [facility] than a hospital,” Jones said. “Our biggest limiter in being able to expand services is our ability to staff.”

Staffing shortages also present a challenge for Brian Gibbons, CEO of Astria Health in Sunnyside.

“We’re really having a hard time finding nurses in these little community markets,” Gibbons said. “And many of our nurses have become traveling nurses. They are compensated three times the rate. Soon you will be replacing nurses who left to become traveling nurses with traveling nurses.

Staffing shortages led Astria to cut staff from five of its 15 medical-surgical beds earlier this year. The hospital also had to cut staff from three of its seven intensive care beds, Gibbons said.

“Suddenly my 25-bed hospital had become a 14-bed hospital,” Gibbons said.

Astria was finally able to retool Sunnyside’s five medical-surgical beds with LPNs (instead of registered nurses), but the intensive care beds are still closed.

“In order for us to use these three intensive care beds, we will need nine intensive care nurses,” Gibbons said. “I just don’t see that happening anytime soon. Our critical care capacity is therefore halved at Sunnyside.