(The Center Square) – Washington hospitals are facing a perfect storm of financial challenges that threaten their ability to deliver, health experts say. Labor shortages, rising salaries, low reimbursement and an insufficient number of post-acute care facilities are putting enormous pressure on hospitals already struggling to provide care pandemic
“Our hospitals are hurting each other financially,” Cassie Sauer, president and CEO of the Washington State Hospital Association, wrote last month. “In the first quarter of 2022 alone, Washington hospitals and health systems lost nearly $1 billion, with a negative operating margin of 10%.”
Susan Stacey, executive director of Providence Inland Northwest, gave a similar account. “I’ve been in health care for almost 40 years and I’ve never seen a financial crisis in health care like we have right now,” he told KXLY. “We’re facing labor and wage shortages, our wages are higher than ever, like many industries. And then we also have travelers and temporary staff who are at a significantly higher cost than we’ve had.”
“For urban hospitals, Medicaid reimbursement rates have not increased in more than 20 years,” Sauer wrote. This means that some urban hospitals pay only 42% of the cost of care for Medicaid patients.
If left unchecked, the situation could seriously affect Washingtonians’ access to health care, Sauer told The Center Square. “We are already seeing a decrease in care. Waiting times are increasing. Ambulances having trouble finding hospitals to take patients to. Some hospitals are closing beds. There could be more,” Sauer said. “Eventually we will see complete hospital closings. This is the most drastic possibility.”
Elizabeth Hovde, director of the Centers for Worker Rights & Health Care at the Washington Policy Center, said Medicaid reimbursement stands out in terms of financial stressors for hospital systems.
“Poor Medicaid reimbursement is a huge reason for problems in hospitals,” he said. “Some hospitals report that Medicaid payments covered only 42 percent of costs. And with more and more Medicaid beneficiaries due to Medicaid expansion and adults without problems needing to prove income eligibility or meet work requirements, it’s not hard to see why Medicaid is causing so many problems for hospitals.”
Sen. John Braun, R-Centralia, agrees that the crisis must be addressed. Asked if the state should raise the Medicaid reimbursement rate for hospitals, Braun told The Center Square, “The simple answer is yes,” but quickly added, “This is not the only problem”.
As for Medicaid reimbursement, Braun said, “I think it’s going to get strong bipartisan consideration in the next session.” Just over half of Washingtonians rely on Medicaid for their health care, making the issue urgent and expensive, according to Braun.
Another factor in the crisis is a statewide shortage of facilities for people who need non-acute health care, such as nursing homes and assisted living facilities.
“Here in Spokane at Sacred Heart and Holy Family, we have close to 100 patients sitting in a hospital bed, who don’t need hospital-level care,” Stacey said. “Not only is this not good for the healthcare system, but it’s very difficult for the patient who was stuck in a hospital bed.”
That adds to the strain on hospitals, Braun said. When a hospital does not provide acute care, they are either not reimbursed for their services or are reimbursed at a lower rate that does not take into account the higher overhead and level of care required for a hospital
“We expect these significant financial losses to continue through the last 6 months of 2022, and for much longer if not addressed,” Sauer said. “Hospitals need help.”
“He’s been pretty tough on the hospitals,” Braun said. “It’s been very hard on their employees.” He is hopeful that solutions can be found for both funding and the lack of non-acute care space.