Evergreen Health CEO outlines financial pressures, service footprint and local clinic status
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Summary
Dr. Torrey Palazzo of Evergreen Health updated the Sammamish City Council on the public hospital district’s service area, recent financial losses, charity care levels and the status of primary-care access near Sammamish following a clinic closure; he said levy revenue approved by voters this summer will begin in 2026.
Dr. Torrey Palazzo, CEO and superintendent of King County Public Hospital District No. 2 (Evergreen Health), briefed the Sammamish City Council on Tuesday about the hospital district’s service area, recent finances and plans to reassess local clinic access.
The presentation outlined Evergreen Health’s footprint — the hospital district covers part of Sammamish — and the systemwide financial pressures facing hospitals in Washington. “I am doctor Torrey Palazzo. I'm the superintendent, and CEO of King County Public Hospital District number 2, also known as Evergreen Health, also known as the community's, East Side, owned hospital,” Palazzo said. He told the council the district serves roughly 330,000 residents within the hospital district and that the broader service area from which most patients come is about a million residents.
Why it matters: Evergreen Health is one of the region’s remaining independent public hospital districts; changes to Medicaid funding and commercial payer contracts affect local access to primary, specialty and emergency care. Council members asked whether the system’s financial outlook would alter services available to Sammamish residents.
Palazzo described multiyear operating losses the system incurred during the pandemic and after, saying, “We had lost $250,000,000, over the course of in operating funds over the course of, the pandemic.” He warned that Medicaid funding reductions projected under federal proposals could further pressure hospitals: he referenced comments from the Washington Hospital Association about large-scale Medicaid reductions. Palazzo also described Evergreen’s safety-net activity: “We did $14,000,000 of charity care last year and wrote off about $30,000,000 worth of what we described as bad debt.”
On local access and the Sammamish facility: Palazzo confirmed Evergreen previously operated a clinic in north Sammamish that closed about a year and a half ago. He said the closure followed a districtwide review intended to stabilize finances while retaining clinicians and services elsewhere in the system. “That was a difficult decision that was made a little over a year and a half ago to close that clinic, which was primary care followed by urgent care approximately, a year ago,” he told council. He added that Evergreen currently has two primary-care clinics, a freestanding emergency department and an urgent care roughly 6.9 miles from north Sammamish and that the district is reevaluating gaps in service now that its finances are on a firmer footing.
On levy and near-term finances: Palazzo told the council Evergreen asked voters in August for a levy lid lift, which passed on Aug. 5. “We are, you know, very grateful and fortunate, frankly, to have gotten the support from the community on August 5. Those funds start becoming available in 2026,” he said, and added the levy proceeds will be used to hire physicians and expand primary and behavioral-health capacity. He said Evergreen also negotiated new commercial payer contracts that improved near-term financial stability.
Council questions and responses: Councilmember O'Farrell described personal experience as a patient and the challenge of finding Medicaid providers and thanked Evergreen. “I have a family member who receives Medicaid and Evergreen are a great facility where Medicaid has always been accepted,” O'Farrell said. Council members pressed Palazzo on contingency plans if funding declines — Palazzo said the district’s plan B includes reevaluating which services are core and, if necessary, consolidating clinic space as it did previously — and on whether Evergreen has absorbed an increase in births as other hospitals reduced obstetric services; Palazzo said Evergreen delivers the second-most babies in the state but that birthrates had eased slightly and that the hospital may see patients transfer from more distant hospitals if local OB services close elsewhere.
What council was told and what remains undecided: Palazzo emphasized Evergreen’s dual role as a clinical provider and a public institution funded in part by a maintenance-and-operations levy and philanthropic/community investments (he said the district invested about $6,200,000 in community programs in 2024). He acknowledged that no decision has been made about re-establishing a primary-care/urgent-care clinic in Sammamish and said Evergreen is “in a position to start thinking about that again.”
Ending: Council members thanked Palazzo for the briefing and offered to partner on outreach or clinic models to improve access. No council action or vote on Evergreen-specific measures took place during the study session; the presentation served as information for future discussion and potential budget or policy follow-ups.
