Statewide survey shows losses continue, though not as deep as in 2022
The Washington State Hospital Association (WSHA) released complete results today from its 2023 financial survey of Washington state hospitals. The survey showed hospitals across the state sustained $1.74 billion in operating losses over the course of the year. Wages and benefits continue to make up the largest expense for hospitals, with wages and benefits increasing nearly 16% between 2022 and 2023.
However, the losses in 2023 were not as extensive as in 2022, when hospitals sustained more than $2.1 billion in operating losses. Investments, COVID release and funding from the Federal Emergency Management Agency (FEMA) helped offset losses, keeping overall margins to -1%. Overall margins in 2022 were -9%.
“Hospitals are still suffering unsustainable losses. Though this year wasn’t as devastating as 2022, hospitals have very little left in reserve to counteract the continuing losses without cutting services.” WSHA Chief Financial Officer Eric Lewis said. “Eighty-five percent of our hospitals in the state are continuing to lose money.”
Hospitals should experience some relief with the enactment of the Safety Net Assessment Program, which provides Medicaid reimbursement rate hikes retroactive to the start of 2024, but that money has yet to come through.
“When finances get tough, hospitals, like organizations in any other industry, have to find a way to lower expenses to keep their doors open. What makes hospitals different is that people’s lives depend on them,” WSHA CEO Cassie Sauer said. “Harmful regulations can make the environment even tougher. Restrictions on the ability to collect facility fees in off-campus, outpatient facilities takes away much-needed funding to maintain infrastructure. Restrictions on the ability of hospitals to merge and affiliate can result in closures, which is in nobody’s best interest. We all want to reduce health care spending, but the reality is hospitals are just one part of a larger health care industry, and they are still financially vulnerable.”
WSHA released the first six months of 2023 financial survey data in October 2023, which showed that hospital operating losses through the first six months of the year were nearly $750 million.
