Picture of the OHSU file in Portland. It is one of several hospitals in Oregon that are facing financial losses because the care of COVID-19 has burdened resources in the last two years.
Bruce Forster
This spring, hospitals and health systems in the northwest are reporting some of their biggest financial losses since the beginning of the COVID-19 pandemic. In some cases, the need to repay loans granted by the federal government at the start of the pandemic contributes to their fiscal problems.
Providence Health Services, based in Renton, Washington, lost $ 510 million in the first quarter of 2022. The University of Oregon, Health and Science, based in Portland, lost $ 64 million in the current fiscal year, including a loss of $ 20 million in February alone.
And the health system of St. Charles in Bend lost 21.8 million dollars and announced layoffs.
All three health systems cited the impact of the Omicron wave, inflation and the health work crisis as reasons for the loss of money.
Tensed systems
Most hospitals have used pandemic relief dollars, from the CARES Act and other sources, to partially offset those losses.
But a lesser-known aid program, the Medicare Accelerated and Advance Payments Program, offered short-term interest-free loans, not grants. And now, the bills are being collected at a time when hospital costs are growing rapidly, and revenues from patient stays and operations are growing more slowly.
At the start of the pandemic two years ago, hospitals and primary care providers in Oregon received more than $ 1.1 billion in advance from Medicare, according to records shared by the Oregon Association of Hospitals and Health Systems. The idea was to keep the money in the early crisis months of the pandemic, when elective surgeries were canceled, by paying in advance to hospitals for services they would provide to Medicare patients in the future.
The program has been used in the past to support hospitals affected by forest fires and hurricanes. The idea is that hospitals will be able to return advances when the crisis passes and operations return to normal. But the pandemic has dragged on - and hospitals and health systems are still facing the consequences. At the same time, the federal government wants to get its money back so it can keep Medicare funding.
Based on the number of Medicare patients being treated, PeaceHealth (based in Vancouver, Washington), OHSU and St. Charles Health System have made the most progress since the Oregon-based credit system: $ 214 million, $ 137 million and $ 94 million, respectively.
Congress has set a repayment deadline and has already extended it once. Hospitals have unsuccessfully lobbied for loans to be forgiven.
Federal attempts to repay loans
Last March, a year after the first payments came out, the U.S. Department of Health and Human Services, which oversees Medicare, began repaying those cash advances by paying health systems 25% less for Medicare compensation claims. Earlier this year, according to a schedule set by Congress, they began paying only 50% of the bill for any service the hospital provided to a Medicare-covered patient.
Hospitals may also choose to repay Medicare loans directly to avoid a reduction in their fees.
The Lake Health District, in the remote Lake District of Oregon, received about $ 5.2 million in grants from the Supplier Aid Fund and a $ 7 million loan from Accelerated and Advance Payments, which it is now repaying.
CEO Charlie Tweit says the Lake Health District is paying off Medicare even though it is considering firing or cutting services, including a long-term care facility and a small hospice program.
“It simply came to our notice then. “We cannot continue to lose money as we have so far,” he said.
Tweet says that the high costs of hiring temporary workers through the agency, for critical positions that Lake Health is unable to fill, are the main driver of losses. Most hospital systems do not have enough nurses and pay high salaries for certified nurses to travel to their hospital for short distances. But, as Lake Health and others have found, it can quickly become more expensive.
The Lake District did not spend the advance payments it received from Medicare, as it seemed likely that the loan would have to be repaid. However, Twitter said it was frustrating to return federal aid - especially when it could not predict how COVID-19 could affect its future operations.
“We have no idea what will happen this fall,” Tweit said. “Maybe he’ll come back with revenge.