Yakima Valley Memorial Hospital Lost Millions During First Part Of 2022 Yakima Herald-Republic
Yakima Valley Memorial Hospital Lost Millions During First Part Of 2022 – Yakima Herald-Republic https://bentoncountynewsnow.com/yakima-valley-memorial-hospital-lost-millions-during-first-part-of-2022-yakima-herald-republic/
Unprecedented. Massive. Unsustainable. These words have been used to describe the financial crisis facing hospitals in the Yakima Valley, the state of Washington and the nation for the first portion of 2022.
Quarterly reports filed with the state’s Department of Health by Yakima Valley Memorial Hospital officials have added a number to go with those words: $28.1 million.
That figure is the budget shortfall Yakima’s only full-service hospital and trauma center reported for the first and second quarters of 2022, through June 30, according to the DOH.
The Yakima Valley’s other two hospitals, Astria facilities in Sunnyside and Toppenish, also reported first-quarter losses, with second-quarter numbers not yet available.
All three hospitals reflect the grim reality facing health care providers throughout the state and nation, said Cassie Sauer, president and CEO of the Washington State Hospital Association.
Sauer and the WSHA reported in July that a statewide membership survey showed a net loss of $929 million for Washington hospitals during January, February and March. Several WSHA officials and hospital administrators across the state said the financial crisis is the worst they’ve ever seen in their decades of work in the health care industry.
“We don’t yet have second-quarter financial results (we are surveying now), but what we are hearing anecdotally is not encouraging,” Sauer wrote in an email to the Yakima Herald-Republic.
“For many hospitals, things have gotten worse (since the first quarter of 2022),” she wrote. “The cost of staff and supplies keeps going up, and the inability to get patients out who do not need hospital care (into long-term care facilities) is crushing.”
Carole Peet, CEO and president of Virginia Mason Memorial, speaks at a press conference in front of the hospital’s emergency entrance on Saturday, March 21, 2020, in Yakima, Wash.
Evan Abell / Yakima Herald-Republic
Memorial’s reports
Yakima Valley Memorial’s financial situation was referenced earlier this month as the hospital announced it would reduce the use of traveling nurses by Oct. 1 and update its staffing plan in response to “large financial losses” it is facing in 2022.
While the hospital did not provide specific data, hospital officials stated “massively inflated costs for travelers” — RNs, often provided by health care staffing agencies, who sign a contract to fill temporary positions — was among the reasons expenses outpaced revenue in the first half of 2022.
In July, Memorial Vice President and Chief Financial Officer Susan Sauder said the hospital “has suffered unsustainable negative margins and cash flow through the first two quarters of 2022.”
Sauder said the struggle to find employees and the use of temporary workers to fill some of those openings have contributed to Memorial’s financial problems, with temporary labor costs escalating by 201% during the past year.
The quarterly reports filed with the state Department of Health confirmed the observations of Sauder and other Memorial officials.
As seen in the adjacent chart, Memorial had an operating margin of minus-$6.9 million in the first quarter of 2022. When nonoperating losses from investments and other sources are added, the total margin for January, February and March of this year is minus-$10 million.
The second quarter was worse, with a total margin of minus-$18.1 million, bringing the 2022 shortfall through June 30, 2022 to minus-$28.1 million, according to the DOH figures.
Memorial has 222 licensed beds, according to the state hospital association’s website. It was founded in 1950 and is governed by the private, nonprofit Yakima Valley Memorial Hospital Association.
Other area hospitals
Astria hospitals in Sunnyside and Toppenish also lost money in the first quarter of 2022, with the DOH reports showing a $182,352 deficit at Astria Sunnyside Hospital and a $1.3 million shortfall at Astria Toppenish Hospital. Second-quarter financial data was not available.
Both hospitals are smaller than Yakima Valley Memorial. Astria Sunnyside is a critical access hospital with 25 beds, while Astria Toppenish is a 63-bed community hospital, according to www.astria.health.
It was a different story for Prosser Memorial Hospital, on the western edge of Benton County.
The 25-bed critical access hospital had a positive total margin of roughly $2.5 million in the first quarter and basically matched it in the second quarter, with a year-to-date surplus of $5,139,071 reported through June 30.
Prosser Memorial announced in February plans to build a new facility on 33 acres north of Interstate 82. Hospital officials recently reported that the project has been slowed by inflation and supply chain issues, causing its estimated cost to increase to $103 million and timeline to be delayed. Groundbreaking is expected sometime this fall, with the new facility expected to open in late 2024.
Yakima Valley Memorial also could see changes soon. On May 9, officials with Memorial and MultiCare Health Systems of Tacoma said the two health organizations were considering a merger.
A “due diligence and information sharing process” that originally was estimated to take several months has been extended through the summer.
Hospital officials said the nursing and other staffing decisions being made at Memorial are not tied to the potential merger.
State, national trends
Staffing shortages and the cost to fill those positions with traveling employees remains a major issue for hospitals across Washington and across the country.
Earlier this month, Yakima Valley Memorial officials noted Washington state has 6,800 open RN positions across the health care spectrum, with 35 RN positions currently open at the Yakima hospital.
Sauer, with the WSHA, said Washington’s problems are the same faced by other hospitals across the country, although “our Medicaid reimbursement rates are really low, and our difficult to discharge patient problem is worse.”
An August report from the data analytics division of the Kaufman Hall health care management consulting company showed lower outpatient volumes and rising expenses have caused financial difficulties for the nation’s hospitals through July.
The report by Kaufman Hall’s Erik Swanson showed a median year-to-date operating margin of nearly minus-1% through July for U.S. hospitals, underscoring the continuing losses many facilities have experienced in 2022.
“An increasing number of patients continued to choose ambulatory centers over hospital settings for surgical procedures, a sign of a larger shift to ambulatory care and new ways of accessing care outside of the hospital,” Swanson wrote in his report summary. “As outpatient activity and revenue sank, labor expenses, which have remained well above pre-pandemic levels throughout 2022, rose.”
The WHSA’s Sauer believes the best solutions to hospitals’ financial woes could be addressed by public policy.
Tops on her list is providing more rehabilitation center and long-term care capacity so state-sponsored patients can leave hospitals after their acute care needs are met.
“Caring for them is very expensive, and once they’ve completed their acute care treatment, the hospital gets little to no money,” Sauer wrote in an email to the Herald-Republic.
“We also need to increase our abysmally low Medicaid rates — which would be particularly helpful in Yakima, with a high Medicaid population — and grow the pipeline for health worker staff,” she added.
A complete list of quarterly financial data for hospitals across the state is available at the Department of Health’s website, doh.wa.gov. Go to the “Data and Statistical Resources” tab, click “Healthcare in Washington” then “Hospital and Patient Data” and go to the quarterly reports listed under hospital financial data.
