Dive Brief:
- Providence posted a $117 million net loss in the quarter ended March 31 compared to the prior-year period, when it notched losses of $4.2 billion, as it reported continued external pressures.
- The Renton, Washington-based health system posted a $345 million operating loss on operating revenue of $6.8 billion. In the first three months of last year, Providence reported $510 million in operating losses.
- The system said higher patient volumes drove improved operating results during the first quarter, as the prior year was affected by the COVID-19 omicron surge. But the system was still affected by increased operating expenses, which grew 5% year over year. Employee salary and benefit costs also increased 5%, while supply costs surged 15%.
Dive Insight:
Providence had a difficult 2022, reporting a $6.1 billion net loss and a $1.7 billion operating loss for its fiscal year.
The nonprofit health system said inflation, labor shortages, delayed reimbursement from payers and supply chain problems are still affecting its bottom line, but its financial outlook is improving.
“Although external pressures are expected to persist into 2023, we are optimistic about the road ahead. Staying the course on our strategies for recovery and renewal is key to navigating the times and positioning us to continue improving the health of our communities well into the future,” CFO Greg Hoffman said in a statement.
In its financials, Providence said it was working on plans to improve its core operations, including meeting demand for surgical care, cutting down length of stay and reducing its reliance on expensive agency labor.
The system, which operates in seven Western states, is also tackling an organizational restructuring. Providence said the “simplified” operational and clinical structure will consolidate administrative leadership from seven regions to three divisions.
The nonprofit’s total net assets declined slightly year over year to $11.58 billion in the first three months of the year.
Net patient service revenue increased 8% to $5.2 billion from $4.8 billion a year earlier. Total operating revenue also increased 8% to $6.8 billion year on year.
Providence said its improved patient volumes were driven by outpatient care, though inpatient admissions were up 4% during the quarter.
