Washington state hospitals are still losing money, leading to 'heartbreaking decisions'

Hospitals in Washington state are still losing money, a downward trend that started during the pandemic. And as they try to cut costs, patients are seeing the effects.

“Over the course of the last year, we've seen hospitals make what seem like mundane but also heartbreaking decisions about service reductions and closures,” said Cassie Sauer, the CEO of Washington State Hospital Association. “If you're someone who's looking for care, it can be a really big deal that your hospital now has less capacity.”

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Part of the problem is that the cost of providing care has risen because of inflation; the cost of supplies, drugs, and energy have all increased, as have staff salaries. But payments to hospitals from Medicaid and Medicare have stayed the same.

“We have a very expansive Medicaid program,” Sauer said. “The state has not kept pace with paying a reasonable amount for that care.”

The percentage of Washington residents on Medicaid and Medicare is growing, Sauer said, as the state expands its Medicaid program and the population ages.

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On top of that, a recent cyberattack cost some of the state’s hospitals millions of dollars.

Another problem for hospitals is the shortage of space at facilities like nursing homes. Because nursing homes in the state are generally already full, patients who are ready to be discharged from hospitals but need ongoing medical care may not be able to leave. Instead, they wait in hospital beds, taking up space that would otherwise go to someone else. Plus, once patients no longer need hospital-level care, the hospital doesn’t get paid for continuing to care for them.

“It’s bad for hospitals and it’s bad for patients,” Sauer said. Hospitals aren’t meant “for a long-term stay. … You don't get to be outside. You don't get to have social time with your friends. You're eating all your meals in the same room.”

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As hospitals try to balance the books, patients are seeing longer wait times and departments that are closed entirely. And hospitals are delaying upgrades to equipment and facilities.

Last year, the state legislature created a new fund to help the most financially distressed hospitals. Nineteen hospitals applied for aid, for a total of $34 million. But the fund was only $10 million, so when payments went out this month, each hospital only got a fraction of the money they applied for. The state does not have a plan in place to fill that $24-million gap.