This article was published in The Portland Business Journal on Mar. 13, 2024.
Oregon hospitals' financial woes continued through 2023
By Elizabeth Hayes – Staff Reporter, Portland Business Journal
Mar 13, 2024
Oregon hospitals continued to lose money on operations last year, according to new data from the Hospital Association of Oregon’s Apprise Health Insights.
The state’s 61 hospitals together posted a negative 1.3% median operating margin, the second consecutive year of operating losses. The association said that without federal CARES Act support in 2020 and 2021, hospitals would have lost money those two years as well.
“We had really hoped to see signs of financial recovery for hospitals and unfortunately, the majority continued to lose money in 2023,” said Becky Hultberg, the hospital association’s president and CEO. “We had expected this was a time of recovery from the pandemic, but this might be the new normal. It raises difficult questions about the viability of hospitals and access to care.”
Other datapoints from the full-year financial report:
- Total operating expenses were $18.3 billion and net patient revenue was $17.2 billion.
- 56% of hospitals reported they could not cover the cost of care only with revenue from core patient activities.
- The median operating margin for large urban hospitals was negative 0.3% and for rural hospitals, it was negative 1.8%.
- The average length of stay was five days, down from the peak of 5.8 days in early 2022. Longer lengths of stay reflect the difficulty hospitals have experienced in discharging patients to a lower level of care.
The last time Oregon hospitals were able to cover their operating expenses with their operating revenue was in 2019. Labor costs alone, which account for at least half of hospitals’ total expenses, have risen 30% since 2020, Hultberg said. PeaceHealth closed its University District hospital emergency department in Eugene on Dec. 1 in large part due to financial losses.
“I think it’s inevitable in this operating environment that hospitals will have to scrutinize their operations to understand how can stay viable, which may mean service reductions or closures,” Hultberg said. “If we don’t’ see a recovery, those disruptions are inevitable.”