Hospital losses grow to $2.7 billion by the end of 2022

April 6, 2023

WSHA recently released the results from its 2022 fourth-quarter financial survey of Washington hospitals, which highlighted the continuing financial woes impacting our state’s health care system. In all, hospitals lost $2.7 billion in 2022, with more than $2.1 billion coming from operations.

Over the course of 2022, the losses compounded each quarter. To make ends meet, hospitals have been forced to spend down reserves that would otherwise be used to invest in new technology and service lines, make infrastructure upgrades, or pay down long-term debt. This is unsustainable, and many hospitals have already taken to closing beds and services as a way to preserve resources for the most critical services. We got good media coverage about the challenges facing hospitals. (Becker’s Hospital Review, Puget Sound Business Journal)

The good news is that lawmakers have agreed to increase Medicaid payment rates for hospitals. Large acute care hospitals have not had a Medicaid rate increase in 20 years. We are asking for Medicaid payments to be brought up to the level of Medicare payments, which pays about 80 percent of the cost of care.

The legislation creates a new directed payment program that will allow Washington to bring in more federal matching dollars to the state’s Medicaid program. It’s a model used in several other states, and we expect it to bring in an additional $1 billion in funding to hospitals through Medicaid payments.

You can keep up to date on the latest information about this legislation and others through WSHA’s Inside Olympia newsletter. (Tim Pfarr)


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