Financial challenges continue for the Inland Northwest service areas of Providence Health & Services-Washington and MultiCare Health System, but Spokane’s two largest health care providers are showing signs of improvement.

This year, Providence posted a first-quarter operating loss of about $4.5 million, second-quarter operating income of about $2 million, and third-quarter operating income of $5.8 million. By comparison, the Renton, Washington-based health care system reported consecutive operating losses of about $19.7 million, $9.9 million, and $23.4 million in the first three quarters of 2024.

The positive trend is also reflected in Providence’s net income results. The provider posted net losses through the first three quarters of 2025 of about $13.3 million, $7.2 million, and $3 million.

Though still in the red, the financial results are an improvement over the net losses of about $29.8 million, $20 million, and $33.1 million incurred during the first three quarters of 2024.

“We’re hoping to be break even by ’26,” says Justin Voelker, chief financial officer of Providence’s Inland Northwest region, referring to the provider's net income.

Voelker’s optimism is driven by a number of factors.

A rise in patient volume, not just at Providence’s hospitals but at its clinics and through its joint ventures, has resulted in a positive financial impact for the health care system, he says.

Revenue-adjusted admissions, which accounts for both inpatient and outpatient activity, have been higher in each of the first three quarters of 2025 compared to their respective quarters the year earlier.

“Pretty significant inpatient growth has driven that. We’re up 6% in total admissions and 8% in adjusted admissions,” Voelker says, noting that those increases either meet or exceed those of comparable health systems.

Certain costs that rose during and following the pandemic have also normalized, he says.

“That was one of the challenges coming out of the pandemic. We had a lot of agency expense, or temporary labor expense, supplies spiked, everything spiked,” says Voelker. “We’ve been able to kind of normalize that and get back into the black.”

Providence currently has 66 temporary or agency employees, down from 141 a year ago, Voelker says. Turnover has also improved for the health care system, dropping a full percentage point from November 2024 to November 2025.

Financials for Tacoma, Washington-based MultiCare’s Inland Northwest region also appears to be trending in the right direction.

MultiCare’s Deaconess and Valley hospitals posted a first-quarter operating loss of about $22 million but showed significant improvement the following quarter with operating income of about $900,000. MultiCare reported third-quarter operating losses of about $8.3 million for its two Spokane County hospitals.

MultiCare projects a fourth-quarter operating loss of about $4.5 million, which would result in a full-year of operating losses of about $33.9 million — which is an improvement compared with last year’s operating losses of about $39 million.

“Like most health care organizations, MultiCare continues to face financial challenges,” says Wade Hunt, president of MultiCare Deaconess and Valley hospitals, in an email to the Journal. “One of the primary factors to our financial challenges includes our payer patient mix. Often, insurance companies do not pay the full price of our services.”

Despite the financial challenges, Hunt expects the upcoming year to yield more positive results for the organization.

“Our 2026 budgeted operating income represents a 75% improvement in the net operating income year over year,” he says. “These projections are a marked improvement that can be attributed to operational improvements, focused on efficiency and greater access to care.”

MultiCare currently is experiencing some positive trends regarding its workforce, Hunt adds.

“Historically, nursing positions have been areas of shortages; we are not seeing that now or in the near term, but industry analysts say that this may last only a short time,” says Hunt. “We are working on strategies to ensure the wellness of our teams.”

Improvements aside, the two health care systems are expected to grapple with new and continued challenges in the years ahead.

Voelker says one persistent issue comes from a concept he has previously described to the Journal as “poor payer behavior.”

“I referenced that we had had to hire additional physicians to help do denial management. That is still the case,” Voelker says. “And many other health systems across the country are experiencing the same issue.”

He expects that to continue with Medicare Advantage payers as well.

“The government is cutting the funding to those payers, which for them to maintain their margins, they’re going to come after somebody else, which is going to be us,” Voelker says.

In the new year, Voelker also says he expects some challenges to emerge from the H.R.1 bill, also known as the One Big Beautiful Bill Act, including the potential impacts caused by disenrollment from Medicaid as funding cuts occur.

Increases to Washington state’s business and occupation, or B&O, tax also is expected to impact Providence, Voelker adds.

“That alone for us is a $6 million impact going into 2026 and then going forward,” he says.

Additional concerns in the year ahead, he adds, likely will be attributed to higher utilization of expensive advanced-immune drugs used particularly for cancer.