Evergreen Health CEO outlines system strength and financial pressure; highlights community services and partnerships

Dr. Ettore Palazzo, CEO and Superintendent of Evergreen Health (King County Public Hospital District No. 2), presented the health system’s “state of the hospital” to the council on June 3, emphasizing both recent quality recognitions and continuing financial pressure across Washington hospitals.

Dr. Palazzo described Evergreen Health as a community‑based public hospital district with more than 5,000 employees, 4,900 on the Kirkland campus. He highlighted the system’s quality recognitions (Healthgrades, Leapfrog A grade, top hospital awards) and specialized services such as a 15‑bed inpatient hospice (the district’s stand‑alone hospice), strong outpatient home care and hospice programs, and partner services on campus (Fred Hutch cancer care; Seattle Children’s pediatric partnerships). Evergreen Health performs high volumes of community care including thousands of births annually.

Financial outlook and investments: Palazzo said Washington hospitals experienced roughly $5 billion in operating losses statewide over recent years and that Evergreen’s own cumulative losses were substantial; the system returned to positive operating performance in the previous year via contract renegotiations and efficiencies, but ongoing pressures remain. He described the hospital district’s historic levy structure and stated the levy rate has not increased while the hospital has grown; the district currently has one of the lowest levy rates in the state. Despite the pressure, Dr. Palazzo said the board maintained community program investments (roughly $6.2 million in community programs in 2024), including partnerships and outreach, and that Evergreen would continue to protect key services and seek operational pathways to remain independent and community governed.

Behavioral health and children’s services: Council members asked about behavioral health and services for children. Dr. Palazzo said Evergreen has tele‑psychiatry and inpatient behavioral health capacity, is embedding behavioral health into primary care clinics (pilot expanded to additional clinics) and is coordinating with Crisis Connections and other partners on the community continuum. He also said Evergreen is partnering with Seattle Children’s on pediatric hospitalist and wraparound services and that additional pediatric service expansions are planned to reduce the need for families to travel across the lake.

Local workforce and affordability: Councilmembers asked about workforce affordability. Palazzo said about 650 employees live in Kirkland and noted that Kirkland’s housing costs challenge recruitment; yet Evergreen’s 12‑month turnover is below regional benchmarks (12.2% vs. a higher regional average). He said culture and workplace efforts have helped retention despite regional housing pressures.

Why this matters: Evergreen is the largest employer in Kirkland and a central provider of hospital, hospice and outpatient services for the city and region; its financial stability and service portfolio affect access to care across the Eastside. Councilmembers expressed gratitude and asked for ongoing partnership conversations.

Ending: Dr. Palazzo thanked council for local support, noted ongoing coordination with city staff and partners, and offered to return with more granular partnership items when appropriate.