March 13, 2024 3:30 a.m.
Saying hospitals are reeling from a second year of losses, a release from the Hospital Association of Oregon says there is a need for policy changes.
An HAO release said a combination of factors including high inflation, workforce shortages and escalating expenses continue to squeeze the operating margins of Oregon hospitals, underscoring the urgency of implementing policy solutions to ensure they can continue to support their communities.
The release said new data released this week by Apprise Health Insights shows that the state’s hospitals posted a negative 1.3 percent median operating margin in 2023, the second consecutive year that the hospitals as a group lost money. Without CARES Act funds propping up hospitals in 2020 and 2021, last year would have marked the fourth straight year hospitals experienced significant financial losses.
According to HAO, in 2023, 56 percent of Oregon’s hospitals reported they were unable to cover the cost of providing care with revenue from core patient activities. The state’s larger urban hospitals had a median operating margin of negative 0.3 percent, while rural hospitals fared worse with a median operating margin of negative 1.8 percent.
HAO President Becky Hultberg said, “Our hospitals are not on a sustainable path”. Hultberg said, “We have systemic problems to address including how hospitals are paid for the care they provide, especially for the most vulnerable in our state. It’s one of the reasons we recently worked with the legislature to boost funding for hospitals that care for a higher proportion of Medicaid and uninsured Oregonians”.
CHI Mercy Medical CEO/President Russ Wooley said, “CHI Mercy Health is in a similar situation as the Oregon Hospital Association shared in their release today, cost increases continue to outpace revenue. In order to remain financially strong, Mercy is focused on growing our services and improving access to care in targeted ways and continuing to work to offset rising costs. Patient care is our highest priority”.
Wooley said, “We appreciate and support the hospital association’s continued work with Oregon policymakers and other groups to help build the healthcare workforce, explore ways to increase capacity outside of hospitals and stabilize the state’s health care system”.
Hultberg said, “The economists who predicted that 2023 would be another difficult year for hospitals turned out to be correct. We must continue to make progress on these complex policy issues in the 2025 legislative session”.