Washington hospitals collectively reported $1.7 billion in operating losses in 2023. What does that mean for Spokane?

Hospitals across Washington state have been hemorrhaging money over the past two years. Just last year, hospitals in the state reported a $1.7 billion operating loss, according to a new report from the Washington State Hospital Association.

What does that mean for Spokane? Based on Department of Health data, a 2023 operating loss of $175.5 million for Providence Sacred Heart Medical Center and a $70.9 million operating loss for MultiCare Deaconess Hospital.

WSHA Chief Financial Officer Eric Lewis called the collective losses across the state “unprecedented and unsustainable” in a news conference Tuesday.

Though this year’s financial losses weren’t as deep as in 2022, hospitals have little left in reserve to counteract the continuing losses without cutting services, Lewis said.

The hospital advocacy organization’s 2022 survey found hospitals losing even more money than last year. More than $2.1 billion was lost by Washington hospitals in 2022, per their figures.

An operating margin is based solely on the money made and lost through the daily operations as a hospital. That loss was mitigated last year by hospital investments and remaining COVID relief. Including these variables, Washington state hospitals lost approximately $270 million last year.

In Spokane, Sacred Heart netted $35.7 million from these factors outside hospital operations. But that still means Spokane’s largest hospital lost a net total of $139.8 million, according to Department of Health data.

A spokesperson for Sacred Heart declined to comment, citing the ongoing strike against the hospital by hundreds of technical workers.

Hospitals are required by state law to report their financial data on a quarterly basis to the state health department. The numbers are disclosed on the department’s website.

The WSHA reported last fall that hospitals were losing money through the first half of 2023 and Tuesday issued its statewide report for the full year.

Deaconess Hospital remains at a $70.9 million net loss in 2023, according to the state health department. But MultiCare spokesperson Kevin Maloney disputed that figure – stating both Deaconess and Valley hospitals collectively lost just $33.9 million in 2023. MultiCare is investigating these “significant discrepancies” and is in contact with the state.

Maloney acknowledged that 2023 posed some “significant financial challenges for MultiCare” like those in many other hospital systems across the state and country.

“Many of the challenges that we have faced similar to 2022: labor and staffing, supply chain inflation, increased payer denial of length of stay and placement of patients,” he said.

Between 2022 and 2023, Washington hospitals gained 11% in revenue due to higher patient volumes, according to the WSHA.

But those gains were offset by a 9% increase of expenses.

Reasons cited by WSHA include increasing inflation, payroll and patients.

“What we really see is that the state of Washington’s hospital system remains very fragile after experiencing more than two years of significant losses,” WSHA CEO Cassie Sauer said.

The Department of Health data also indicated other Spokane-area hospitals reported a 2023 net loss of $28.4 for Providence Holy Family Hospital and a $19.5 million net loss for MultiCare Valley Hospital through the third quarter.