Providence operating loss tops $1B during first three quarters
Providence recorded a cumulative $1.1 billion operating loss during the first three quarters of this year as staffing shortages and weak market conditions buffeted its finances, the health system announced Monday.
The Renton, Washington-based nonprofit company also cited inflation, reimbursement delays and supply chain disruptions as contributors to its poor performance. Providence reported a net operating loss of $164 million for the third quarter, compared with $424 million in the second quarter.
Operating revenue during the first nine months came to $19.57 billion, a 4% increase from the first three quarters of 2021. Expenses rose 7% year-over-year to $20.67 billion, including a 9% increase in salaries and benefits and a 6% increase in supply costs. These numbers do not factor in the operations of Newport Beach, California-based health system Hoag, which split from Providence this year. Investment losses reached $1.4 billion during the first three quarters
Providence is addressing its labor situation, Chief Financial Officer Greg Hoffman said in a news release. “Retention and recruitment continue to be a significant area of focus, and we are starting to see the results of a concerted effort to reduce our overall reliance on costly agency staffing, including converting traveling nurses to permanent staff roles,” he said.
In July, Providence announced cuts to its executive team as part of an effort to redirect funds toward frontline workers.