Spokane Journal of Business

Health care system to continue to be challenged

Medical facilities here incurring COVID-19 costs while swarmed with patients

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-Kevin Blocker
Providence Health Care, which operates the Sacred Heart Medical Center campus, has seen expenses increase as revenues have declined.

While Washington state officials say the first COVID-19 vaccinations will be available to select groups of residents this month, local health care officials say there will continue to be areas of uncertainty heading into next year.

In adjusting to COVID-19, Shelby Stokoe, Providence Health Care’s chief financial officer, says Providence is incurring $7 million to $8 million annually of new costs associated with the pandemic for personal protective equipment, lab testing, and increased staff and security to help maintain visitor restrictions.

“We expect this to continue through 2021,” says Stokoe, who is based in Spokane.

Providence Health Care operates Providence Sacred Heart Medical Center & Children’s Hospital and Providence Holy Family Hospital here, as well as a number of Spokane-area urgent-care clinics and specialty practices.

Hospital stays now are longer, which drives up costs for the medical care facilities. She anticipates additional expenses will be incurred in the distribution of vaccines. 

“The costs of those two impacts aren’t yet fully known,” she says. “Long length-of-stay patients have been a long-standing situation, now exacerbated by COVID.”

Through September, excluding funding from the Coronavirus Aid, Relief, and Economic Security Act, Providence’s revenues are down 4%, and expenses have increased 2% compared to the first nine months of the prior year, she says. 

It’s a strong recovery from earlier in the year, she says.

“In the month of April alone, our patient revenue was 35% lower than budget, driven by hospital admissions at half of normal, surgical volumes at 40% of normal, and ER visits at 65% of normal,” Stokoe says.

CARES dollars received only accounted for about a week’s worth of work. Providence responded by cutting executive salaries 10% to 50% for the remainder of 2020 in an effort to reduce revenue deficits, she says.

Providence will continue to secure a new revenue source through telehealth visits in place of in-person visits in 2021, according to Stokoe.

Despite COVID-19, Dr. David O’Brien, senior vice president and CEO for MultiCare Health System’s Inland Northwest region, says the organization will continue to expand its Indigo Urgent Care Clinics across the state.

“Nine new Indigos have opened in the Puget Sound this year, and we recently opened a new Indigo in Liberty Lake,” O’Brien says.

At Spokane Valley-based pathology services company Incyte Diagnostics, CEO Patty Sipes says laboratory testing will continue at a high rate through most likely a substantial part of 2021.

Sipes says Incyte was just notified by the Washington state Department of Health to expect a bigger spike in COVID-19 testing after Christmas compared to Thanksgiving.

Located at 15912 E. Marietta, 2 1/2 miles east of the company’s headquarters, a new 13,000-square-foot clinical testing labs serves Washington, Idaho, Montana, Oregon, and Alaska.

“We’re in the process of another round of new hiring to help us keep up with demand,” Sipes says.

The company had 370 employees to start 2020. Incyte now has over 450 employees, she says.

Kevin Blocker
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