The Tri-Cities continues to grow and Richland’s Kadlec Regional Medical Center has plenty on the horizon to keep pace with it.

The health care provider’s latest primary care clinic, currently under construction near Keene and Bombing Range roads in West Richland, is set to open in June and will have up to 10 physicians based there.

This fall, Kadlec will boost its behavioral health offerings with the onboarding of its first psychiatrist.

And at the Richland hospital itself, a dozen beds were recently added through rearrangement of the existing facility, and there are plans to expand and augment its operating rooms, including increased imaging capabilities during procedures.

“We are continuously looking at how we can keep up with the growth,” said Dr. John Matheson, Kadlec’s chief medical officer. “How can we make the most of what we have to get what we need?”

John Matheson

But as Kadlec and other health care providers work to meet the growing and diverse needs of the region, they’re also trying to navigate perennial and increasingly difficult challenges in the industry related to workforce management, growing costs and shrinking reimbursements for federally subsidized care.

A balancing act

Kadlec has more than 4,300 caregivers spread across the hospital and its associated clinics, from physicians and nurse practitioners to imaging techs and certified nursing assistants, working days, nights and swing shifts. It’s the second-largest employer in the region, according to data from the 2025 Tri-Cities Area Journal of Business’s Book of Lists.

“We have really incredible people,” said Emily Volland, Kadlec spokeswoman. “They choose to show up during the most challenging time in health care.”

But burnout and caregivers departing for other roles in pursuit of better work-life balance haven’t gone unnoticed. Business leaders raised concerns in mid-2025 during the Tri-City Regional Chamber of Commerce luncheon focused on health care about doctors retiring early or leaving the region after short stints.

“Everywhere I’ve been, it’s been an issue,” said David Elgarico, market president and CEO of Trios Health, at the time. “There aren’t enough physicians.”

In December 2025, the federal Health Services & Resources Administration released its projections for the health care workforce by the year 2038. Washington state is projected to need more than 31,000 care providers but is estimated to be short more than 5,000 people filling those roles.

Part of the decline is from baby boomers retiring, with the generations after them not filling all those vacated health care positions. An older population also requires more care, adding to demand. Then there’s the stress of working in health care during and after the Covid-19 pandemic and the growing demand for less harried but still fulfilling work.

Rich Meadows 

“Clinicians and staff increasingly expect flexibility, growth opportunities, meaningful work and a culture that supports well-being,” noted the American Hospital Association in a report in December. “Organizations that fall short risk losing talent to competitors that adapt faster.”

Hospital leaders said one long-term strategy they have used to mitigate turnover is their residency programs, as doctors tend to stay where they train.

Kadlec officials said they are also looking at other ways to ease pressures on caregivers, such as creating designated hospitalist positions in disciplines such as obstetrics and gynecology, reducing the need for other doctors in that field to serve at the hospital away from their practice.

“We’re having to get a little creative with our staffing models to make it sustainable,” said Dr. Rich Meadows, chief medical officer for Providence Clinical Network in Southeast Washington.

Growing expenses

Inflation has affected the cost of nearly everything and hospitals aren’t immune. Labor costs – employee wages, benefits and related spending – have grown the most and now represent more than half of hospital operating expenses on average, according to the American Hospital Association.

But plenty of other hospital necessities also have seen rising costs. Pharmaceutical prices grew by nearly 30% between 2019 and 2022 and are the fastest growing cost in health care since 2023, according to KFF, a health policy analysis and research firm.

Medical supplies such as personal protective equipment, syringes and other consumables get more expensive each year. Advances in medical technology can lead to better health outcomes but also require substantial and more frequent investment. And building and maintaining hospitals and related facilities face growing construction material costs.

“At a point you start competing for resources,” said Reza Kaleel, CEO of Kadlec and Providence Southeast Washington.

Reza Kaleel

Those cost pressures drive health care systems to look for any efficiencies they can, such as bringing clinics into their system to improve operations through economies of scale or adapting existing resources to meet demands for care, such as Kadlec adding beds without adding onto its facility.

And just as technology can improve health outcomes, some hospital leaders are also seeing how it can drive efficiency. Kaleel said in 2025 that while he has concerns around artificial intelligence, or AI, Kadlec was looking at ways to embrace it, such as programs that would generate notes for doctors via audio transcription.

But the drive to reduce tasks and maximize the number of patients providers can see in a day is giving hospital leaders pause.

“Sometimes it feels like we’re getting further from the patient, and we need to be cognizant of that,” Brian Sims, president of Lourdes Health in Pasco, told business leaders in mid-2025.

Funding challenges

Congress’ decision to set new requirements for individuals to qualify for Medicaid, thus likely reducing reimbursements to care providers, in addition to failing to renew expiring subsidies for health insurers have prompted some of the loudest criticisms from health care leaders.

“The people who lose Medicaid will still give birth and they’ll show up at the ER without prenatal care,” Cynthia Flynn, managing partner of Columbia Birth Center in Richland, said ahead of Congress approving the One Big Beautiful Bill last summer. “I’ve worked in countries where only the rich had prenatal care. It doesn’t work out well.”

Kadlec officials recently said those cuts at the federal level exacerbate an already imbalanced funding model, where designated critical access hospitals, which are small hospitals in rural areas that provide care to communities that are far from larger hospitals, receive full reimbursement of their costs while other hospitals have to eat the difference. Kadlec does not qualify as a critical access hospital. It is a state-designated Level II trauma center, the second-highest trauma designation in Washington.

Kadlec officials added that in the short term, those cuts could lead to some savings, but only because those no longer able to afford care due to loss of coverage will delay seeing a doctor. Eventually, that will lead to people with more complex and advanced health issues seeking care at more expensive and increasingly crowded emergency rooms.

“Overcrowded ERs harm everyone,” Kaleel said.

“And it builds over time,” added Meadows.