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‘Incredibly concerning’: Washington hospitals report $1.75 billion loss in first half of 2022

SEATTLE — Washington hospitals have been struggling with overcrowding issues, and now results from the Washington State Hospital Association’s hospital financial survey showed they’re also facing major money problems.

In July, results for the first quarter revealed hospitals and health systems in Washington lost nearly $1 billion.

On Tuesday morning, numbers for the second quarter were released.

“The results are clear and incredibly concerning. What we see is that hospitals in Washington state continue to face an unstable financial situation,” said Cassie Sauer, president and CEO for the WSHA.

WSHA officials say hospitals across the state had approximately $1.2 billion in operating losses during the first six months of 2022.

“These operating losses, combined with investment losses, resulted in net losses for hospitals across Washington state of $1.75 billion in the first six months of 2022. This 12% loss is unsustainable,” said Eric Lewis, chief financial officer for WSHA.

Lewis says some of the reasons for the losses are low Medicaid reimbursement, high inflation and labor shortages, complex patients whose care costs are much higher than reimbursement, and a large number of patients ready for discharge who are not able to secure placement in a nursing home or acute health care facility.

“74 of 85 acute care hospitals in the survey experienced negative cash flow. More than 50% of these hospitals will be out of cash by the end of 2023 if these losses continue,” said Lewis.

Mike Marsh, CEO for Overlake Medical Center in Bellevue, says he never thought he’d be in this position.

“Of course, we could cut costs. Unfortunately, what we’re seeing locally and nationally is cutting costs usually amounts to cutting services or staff. Cutting services places the safety net that hospitals provide at risk, and cutting staff makes an already bad staffing situation worse,” said Marsh.

To help hospitals recover, WSHA says they need the government’s help.

“We are very much in need of the state legislature’s help. This year we need Medicaid payments to increase significantly, and when I say significantly, WSHA will be requesting hospital Medicaid payments to increase by more than a billion dollars a year,” said Chelene Whiteaker, senior vice president for WSHA.

Whiteaker says this is not going to cover all of the losses, but hopes it will make a difference.