Another recent article in the Seattle Times painted a grim picture for the financial state of health care systems in Washington State. With more money going out than coming in, hospitals are currently being forced to reduce services they provide, and, they argue, it’s only going to get worse unless the state legislature steps up with financial aid. These asserted financial losses force hospitals to ask the State for help, and may signal campaigns for long term changes.

This issue has been discussed in recent blog posts on the recent surge of care needs due to people sick with the flu and RSV, as well as the consequences of a lack of care, particularly understaffing.

A recent survey by the Washington State Hospital Association found that, in the first nine months of 2022, revenues totaled $23 billion dollars, but expenditures were greater: $25 billion. Half of this difference was spent on traveling nurses: nurses who typically must be paid much more than a regularly employed nurse doing the same job.

It was important for the Times author to note that the executive pay made up “less than 1% of expenses”, although without the context within which to place this statement, it’s hard to make any judgments about it. If expenses totaled $25 billion, then executive pay for the hospitals in Washington was something less than $250,000,000.

Leaving aside whether/to what extent hospital executive salaries are contributing to this problem, the obvious immediate danger posed to citizens of the state is a lack of access to care. Without money to pay nurses, hospitals have fewer beds available to patients who need to be admitted for care. Specialty services – such as cardiology services – are being cut in Yakima. And community hospitals who would otherwise provide care are transferring patients in greater numbers to bigger hospital systems.

In addition to a lack of available care, this situation is worrisome for other reasons. If hospitals do accept patients but do not have the resources to adequately provide care for them, people can get hurt. And more generally, whenever we hear that hospital systems are in financial difficulty, it is not hard to imagine hospitals and their representatives raising tort reform as another “solution”. This is an often heard drumbeat in such circumstances, leaving aside the lack of data supporting this contention.

Hopefully the hospitals and the legislature can work together to resolve this hopefully temporary issue. Certainly, there is some merit to the hospitals’ request to increase Medicaid reimbursement rates, and for increases to other funding such as staffing at long term care facilities and behavior health centers.