(Photo: Harborview Medical Center, Seattle – courtesy UW Medicine)
Hospital administrators say they’re suffering such big losses that they might have to cut services, and they worry some might have to close altogether.
A Washington State Hospital Association survey found the following:
• While operating revenue increased by 5%, operating expenses increased by 11%. This combined with non-operating investment losses, resulted in a total margin of negative 13%. The net loss for hospitals across Washington state was approximately negative $929 million for the first three months of 2022.
• Medicaid payments for some hospitals covered just 42% of the cost of delivering care in Q1.
• Labor costs increased significantly. From Q1 2021 to Q1 2022 hospitals increase pay for employed staff by 10% on average.
• To keep services open, hospitals increased the use of temporary staff by 84%. The hourly rates for these workers increased by 63%, year over year.
• All 52 urban hospitals/health systems reported negative margins and account for 86% of the losses statewide. Of the independent rural hospitals responding, 18 out of 32 had negative margins.
WSHA director, Cassie Sauer, says most hospitals are not-for-profit but still need a little margin to pay for things like higher wages and staffing incentives or upgraded equipment as the tech changes.
Sauer says the concern is that it’ll mean less access for patients, and it could mean hospitals facing bankruptcy, reduced services or closure. “In the communities where the hospitals are most at risk, in many cases, they’re the only hospital in that community,” Sauer says, “and so losing the hospital would be a really big deal. It’s a big deal anywhere, but especially in a single hospital community.”
The administrators say Medicaid rates haven’t increased in 20 years, and payments often cover less than half of hospitals’ costs, so they are planning to ask state lawmakers for list of ways to help in the January session, including a boost to the Medicaid rate schedule.
The Washington State Health Care Authority sent Northwest Newsradio the following statement in response:
“While we can’t speak specifically to WSHA’s data without taking a closer look, it is true Medicaid hospital rates in Washington have remained steady for many years.”
“We want to note our fee schedule (list of rates we pay) is considered the “floor.” There are other payment enhancements that occur in some circumstances:
• Medicaid managed care plans negotiate enhanced rates as needed for specific situations.
• Some hospitals, including Critical Access Hospitals and those participating in the Certified Public Expenditure program, are reimbursed at cost, meaning they file cost reports that show their true cost of care, and their payment rates provide for reimbursement of costs.
• The hospital safety net assessment is used to support hospital services to Medicaid clients.
• We pay an administrative day rate (average nursing home rate in the state) plus pharmaceutical costs for patients who cannot be discharged due to lack of access.”
“An increase in hospital rates would require an investment of new funding from the Legislature.”
