Providence posts $345M loss as financial woes continue
This year, Washington hospitals are on track to lose $5 billion. Washington hospitals are on track to lose $5 billion this year, after already losing nearly $3 billion last year.
Providence continues to report steep operating losses, as the industry recovers after the Covid-19 Pandemic.
Renton's health care giant announced on Monday that it had made $345 million in operating income for the three-month period ending March 31, 2019. Providence's first-quarter loss of $510 million last year was still an improvement.
In a press release, Greg Hoffman, Chief Financial Officer of the company said that despite external pressures expected to continue into 2023 we remain optimistic. Staying on course with our recovery and renewal strategies is crucial to navigate the times, and position us to continue improving our communities' health well into the future.
High labor costs and stagnant revenue have contributed to the losses, as have reimbursement rates that are not keeping up with rising healthcare costs. Patients who no longer require acute care can't also be discharged into long-term facilities. Hospitals are also still dealing with high demand for acute-care and can't work quickly through the backlog in non-urgent surgeries -- a major revenue source -- that were delayed during the pandemic.
Washington hospitals lost nearly $3 billion in total last year. Providence's losses totaled $1.7 billion. Officials in the health care sector have warned that continuing financial problems will lead to service reductions, starting with rural areas.
Providence shut down its 16-bed hospice inpatient unit in Everett in February due to staffing and cost issues. Providence sold its Renton HQ to Seattle Children's in December for $84 Million. The health care provider cut its leadership team by a number of unnamed executives last summer.
Providence's latest financial report also stated that it had reduced discretionary expenditure on items like travel, third-party contractor, purchased services, and professional services.
Providence Swedish's Puget sound-area operations, which include eight hospitals and over 200 clinics, accounts for approximately 21% of its revenue. Providence Swedish, which includes the Puget Sound-area operations, reported a $81 million operating deficit for the quarter. This was the second largest Providence market behind only its Southern California operation.
Providence's non-operating and investment finances have rebounded strongly from last year. They went from a loss of $330 million in the first quarter 2022 to a gain of $228 million this quarter.