PROVIDENCE OREGON – A new report from Hospital Association of Oregon states, “the health care system is buckling.”
Some of the key points about why Oregon hospitals are struggling:
- Costs of providing care are rising steeply.
- Payroll and supply costs increased more than 40% between 2020-2024.
- Payments to hospitals do not cover the cost of providing care.
- Medicaid and Medicare pay Oregon hospitals 56 cents and 82 cents, respectively, for every dollar of care provided.
- Discharge delays are impacting patients and the hospitals that serve them.
- Patients spent over 81,000 avoidable days in Oregon hospitals, costing $324 million in losses.
- Oregon’s regulatory environment is complex and costly.
- The state has created more than 2,000 rules specific to acute care hospitals.
Exacerbating those points right now are government tariffs and federal cuts to Medicaid.
As Erik Wexler, Providence president and CEO, recently outlined, cuts to Medicare and Medicaid have already reduced our funding by $500 million this year, with the potential for additional cuts stacking on another $1 billion to that figure.
If tariffs on foreign goods move forward, supply costs could increase by tens of millions of dollars every year.
Our situation is not unique. According to the Hospital Association of Oregon:
- Around half of the state’s hospitals are losing money on operations.
- More than two-thirds aren’t making enough to update facilities and replace outdated equipment.
- Oregon hospitals cut more than 800 jobs in 2024 to stem financial losses.
- Oregon has the second lowest number of hospital beds per capita in the U.S.
The hospital association warns if these trends continue, the result could be service reductions, consolidations, and even hospital closures. Already, patients can’t find doctors or must wait months for an appointment.
Melissa Damm, Central Division chief financial officer, tells OPB that state regulations have led to Oregon hospitals struggling more with post-pandemic recovery than in other parts of the country. Coupling that with additional federal cuts has put financial stability in jeopardy and may force challenging choices about patient services.
“We all understand that Medicaid right now, in the current state, is underfunded in the budget,” she says. “Frankly, we look at what we are estimating for federal cuts, those are also large dollars. If we see those types of cuts, it’s going to be really difficult.”
Read the report
Key points on hospital finance
See the news
OPB l Oregon hospitals’ bleak financials leaves them vulnerable to tariffs, proposed Medicaid cuts
Portland Business Journal l Oregon hospitals continued to struggle in 2024
KOBI-TV l Providence discontinuing two programs amid statewide financial instability
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