The Inland Northwest’s two largest health care systems are still operating in the red so far in 2024, continuing what is now a multiyear trend that has impacted most hospitals statewide.

Renton, Washington-based Providence suffered a nearly $30 million first-quarter operating loss within its Inland Northwest region—a roughly $6 million improvement compared with the $36 million operating loss in the first quarter of 2023.

“We’re still not where we want or need to be,” says Stan Moser, interim CFO of Providence’s Inland Northwest region.

Providence posted an operating loss of about $187 million for all of 2023 in its Inland Northwest region.

Tacoma, Washington-based MultiCare Health System’s Inland Northwest region experienced a $16 million operating loss through the first four months of 2024. The health system suffered a nearly $14 million operating loss during the year-earlier period, the Journal previously reported.

For all of 2023, MultiCare finished with a roughly $50 million operating loss in its Inland Northwest region.

“Pacific Northwest hospitals, including Washington hospitals, are still climbing out of some of the aftereffects of COVID,” says Alex Jackson, chief executive of MultiCare’s Inland Northwest region.

The financial woes are far from exclusive to the Inland Northwest.

Hospitals across the Evergreen State posted a combined $1.74 billion in operating losses over the course of 2023, the Washington State Hospital Association reported.

While the statewide figure is an improvement over a $2.1 billion loss in 2022, 85% of the state’s hospitals continued to report that they were operating in the red last year.

Despite the concerning multiyear trend, Moser and Jackson both say there are reasons for optimism as the Spokane-area health systems look ahead to the remainder of 2024 and beyond.

“The population is going to continue to return to get their health care needs,” Moser says. “I think we’re going to have growth that at least mirrors the growth in the community.”

Providence’s Inland Northwest region is projected to fare better financially in 2024 than it did in in 2023, Moser says. He attributes the first-quarter improvement at Providence to a multitude of factors, including an increase in both inpatient and outpatient volume.

“Once you get a certain number of patients, then as you start adding on, that’s when you’re really in a position to come out of the red or build upon that margin,” Moser says, noting that there are relatively fixed costs regardless of patient volume. “Extra volume really helps in health care.”

Moser speculates that people who postponed elective procedures during the pandemic may be adding to the increase in volume.

Decreased reliance on costly travel nurses has also benefited Providence.

“Our use of travelers has absolutely come down this first quarter,” he says.

Some nurses are returning to the workforce, Moser says, although the labor shortage continues to present a challenge across not just nursing, but all areas of Providence.

“That’s improved, but there’s still work being done,” says Moser.

As is the case across many industries, the health care labor shortage is expected to be a long-term issue, says Beth Hegde, director of communications at Providence.

“We all have to look at the long-term solutions,” Hegde says. “The job situation is where we’re pouring a lot of interest into.”

Providence also has continued to make improvements in addressing long length-of-stay patients who may not be doing well enough to go home but are doing well enough to be placed in a lower level of care. Long length-of-stay patients pose a significant cost for hospitals, the Journal previously reported.

“A team of people have spent a lot of time working on that particular issue,” Moser says.

MultiCare also has seen signs of progress in its Inland Northwest region despite the continued operating losses.

“We recognize that these financial challenges cannot be solved overnight, but we have continued to make thoughtful, deliberate steps forward,” Jackson says.

Labor costs and inflationary costs, including supply chain and pharmaceutical costs, are among the primary reasons for MultiCare’s operating losses, however the organization has made strides in other areas.

“Our nurse retention numbers in the Inland Northwest region are the best I’ve seen in the last few years,” says Jackson, who adds that his organization’s nurse retention numbers are outperforming the national average.

The increase in nurse retention has led to less reliance on travel nurses, he says.

Another reason for optimism, Jackson says, is the new agreement that MultiCare and Premera Blue Cross reached last month.

“Through the negotiations, our goal was to be fairly compensated for the services we provide,” Jackson says. “We were able to find a common ground that we feel like is a more fair rate of compensation.”

MultiCare is continuing to improve access to care in the community by investing in new facilities throughout the region.

On June 17, the health care system opened a new primary care clinic in the Indian Trail area, Jackson says. That clinic also will include behavioral health services.

“We’re going to open it as a 12-hour a day clinic,” Jackson says, noting that those hours are not the industry norm for primary care clinics.

MultiCare also opened an advanced primary care clinic in Spokane Valley in late April and recently expanded its clinic in Airway Heights. The health system also opened a new behavioral health clinic in the Hillyard neighborhood last year.

“These investments will help us this year, but they’ll really help us in the years to come,” Jackson says.