The Legislature has appropriated state general funds to the University of Washington hospitals since 1975, according to UW’s 2021–23 budget request. However, the amount has been fairly small until recently. From fiscal year 2012 through 2019, general fund–state (GFS) appropriations for UW hospitals averaged about $13 million a year. Since then, UW has requested and received additional appropriations from the state to support the operations and teaching mission of Harborview (HMC) and the UW Medical Center (UWMC). Most of these additional appropriations have gone to the UWMC.

• In 2018—before the pandemic—UW requested $28.0 million for 2019–21 (and another $28 million for 2021–23) to “support the major safety net and teaching activities of” HMC and UWMC. The Legislature appropriated $10.0 million for this purpose for 2019–21.
• In the 2021 supplemental, the Legislature appropriated $35.0 million for the UWMC from the state’s share of the federal coronavirus state fiscal recovery fund (CSFRF).
• In 2020, UW requested $10.0 million for 2021–23 (and another $10.0 million for 2023–25) to “support the major safety net and teaching activities of” UWMC and HMC. The Legislature appropriated $40.0 million from the GFS for 2021–23 for that purpose.
• For the 2023 supplemental, UW requested $100.0 million for FY 2023 “to support the major safety net and medical training activities of” UWMC and HMC. The Legislature appropriated $50 million from the CSFRF for that purpose.
• For 2023–25, UW requested $40.0 million (and another $40 million for 2025–27) “to support the major safety net and medical training activities of” UWMC and HMC. The Legislature appropriated $80.0 million for FY 2024 from the GFS and $20.0 million from the CSFRF.

Now, for the 2024 supplemental, UW is requesting another $100.0 million for FY 2025. UW says its shortfall is due to high labor and liability insurance costs, “difficult to discharge” patients, and its “unique government centered payer mix of Medicaid and Medicare patients.”

According to the request, “conditions have started to improve.” Nevertheless, UW wants

one­time bridge funding in advance of the expected new directed payment programs currently under evaluation by Medicare. These programs are expected to be phased in by the end of FY25. Funds will ensure viability of cash inflows as a mitigation for the increasing level of operating expenses that currently are growing faster than increases in net revenues from payers.

Meanwhile, the 2021–23 operating budget required UW to report to the Legislature by Dec. 2022 on how the $40 million appropriated for UW affected the “fiscal position” of HMC and UWMC. In response, UW submitted KPMG audits of the HMC financial statement and UW Medicine select units (which includes UWMC, UW neighborhood clinics, UW physicians, and Airlift Northwest). The HMC audit notes that net operating revenues increased in FY 2022 “due to an increase in state appropriations, which was offset by a decrease in investment income, donations, and COVID-19 federal stimulus funding.”

The 1991–93 state operating budget stated, “It is the intent of the legislature that Harborview medical center continue to be an economically viable component of the health care system and that the state’s financial interest in Harborview medical center be recognized.” Every budget since has affirmed that. (The 2023–25 budget: “The legislature affirms that it is in the state’s interest for Harborview medical center to remain an economically viable component of the state’s health care system.”)

That statement of the state’s interest has not included UWMC. Nevertheless, UWMC has consistently received a larger share of the state appropriations for UW’s hospitals. From 2000 through 2020, UWMC received slightly more than half of the GFS appropriations for the hospitals each year. Since 2020, UWMC has received the lion’s share of the additional funding. In 2021, the $35.0 million from the CSFRF was entirely allocated to UWMC. In 2023, the $50 million from the CSFRF was entirely allocated to the UWMC. UW’s 2024 budget request notes that $90 million of the $100 million that was appropriated by the Legislature this year for the hospitals will go to the UWMC. ($10 million will go to HMC.) The request does not specify to which hospital the $100 million for FY 2025 would be directed.

(Previous posts on agency 2024 supplemental budget requests are here.)