Providence continues good faith negotiations with Aetna in Washington State
The current contract was originally negotiated in pre-inflationary times; since then, Providence has absorbed double-digit increases in the cost of drugs, supplies and labor.
Seeking to keep up with the rising cost of pharmaceuticals, medical supplies and wage inflation for nurses, doctors and other vital health care professionals, Providence continues to negotiate in good faith with Aetna as the deadline for contract termination nears.
However, if Aetna remains unwilling to accept the reimbursement increases that other insurers have agreed to, about 35,000 Washingtonians may be out of network starting Sept. 1 at hospitals and clinics in the Providence family of organizations, including Providence Swedish and Kadlec.
Providence’s current contract with Aetna was originally negotiated in pre-inflationary times. Since then, Providence has absorbed rising costs due to inflation. The seven-state health system has seen its supply, drug and labor costs soar 26% since 2019. This led to a net operating loss of $1.2 billion for Providence in 2023 and a $123 million net operating loss in Q2 of this year.
Meanwhile, for-profit insurers like Aetna have recorded exorbitant profits. In Q2 alone, CVS Health/Aetna made $3.7 billion in operating income while returning $858 million to shareholders. Yet, their latest counterproposal fails to adequately cover Providence’s increased costs due to inflation.
“Providence is committed to combatting rising costs, yet we cannot do it all on our own. Our partners also need to be part of the solution. For-profit insurers, like Aetna, continue to reap the benefits of multi-year contracts that do not reflect the current health care landscape, with reimbursement increases substantially lower than the costs to provide care,” said Providence CFO Greg Hoffman.
“Providence cares deeply about the people we serve, and we are hopeful a resolution can be achieved without disruptions to care. At the same time, we cannot continue to absorb the increased costs required to provide high-quality care without adequate, timely reimbursement for the services we provide,” Hoffman said.
Providence has begun notifying patients with scheduled appointments of the potential termination so they can work with Aetna to determine how their insurance coverage is impacted and potentially make other arrangements for their care. Patients are also encouraged to urge Aetna to reach an agreement with Providence so they can continue to see the doctors and care teams they know and trust.
Meanwhile, the Providence family of organizations remains in network for the vast majority of other commercial insurance plans. The health system also continues to offer financial assistance for eligible insured and uninsured individuals.
Providence’s team of financial counselors are available to talk with Aetna patients about potential assistance with out-of-network costs if an agreement is not reached. Patients can visit https://www.providence.org/obp/or/financial-assistance or call 855-229-6466 to learn more.
About Providence
Providence is a national, not-for-profit Catholic health system comprising a diverse family of organizations and driven by a belief that health is a human right. With 51 hospitals, more than 1,100 physician clinics, senior services, supportive housing, and many other health and educational services, the health system and its partners employ more than 129,000 caregivers serving communities across seven states – Alaska, California, Montana, New Mexico, Oregon, Texas, and Washington, with system offices in Renton, Wash., and Irvine, Calif. Learn about our vision of health for a better world at Providence.org.
About Providence Swedish
Providence Swedish has served the Puget Sound region since the first Providence hospital opened in Seattle in 1877 and the first Swedish hospital opened in 1910. The two organizations affiliated in 2012 and today comprise the largest health care delivery system in Western Washington, with 22,000 caregivers, eight hospitals and 244 clinics throughout Western Washington – from Everett to Centralia. A not-for-profit family of organizations, Providence Swedish provides more than $545 million in community benefit in the Puget Sound region each year. The health system offers a comprehensive range of services and specialty and subspecialty care in a number of clinical areas, including cancer, cardiovascular health, neurosciences, orthopedics, digestive health and women’s and children’s care. For more information, visit providence.org/swedish.
