Providence reports first quarter results for 2021
Following a COVID-19 peak in January, a sense of normalcy begins to return to health system operations.
RENTON, WASH. May 17, 2021 – Providence, one of the largest health systems in the U.S., today released a quarterly report that signals a return to more normal operations. The report indicates that Providence’s COVID-19 census hit its highest peak in early January 2021, with an average weekly census of 2,035 in the first week of the year. Following a gradual downward trend throughout the quarter, COVID-19 cases reached pre-surge levels by mid-March.
“We’re turning a corner and seeing signs of renewal,” said Rod Hochman, M.D., president and CEO of Providence, which was the first health system in the U.S. to admit a patient with COVID-19. “Throughout this crisis, the caregivers of Providence have stepped up to respond to the needs of our communities, and we are incredibly grateful to everyone who has been serving on or supporting the front lines of care.”
“Getting people vaccinated has been another major area of focus as we have partnered with our communities and federal and local health authorities on mass vaccination efforts. This has made an important difference in protecting one another, preventing the spread of the virus and curbing the rate of COVID-19 admissions,” Dr. Hochman said.
The January spike in cases had a direct impact on Providence’s financial performance for the quarter. Many non-emergent, non-COVID procedures had to be deferred in January, resulting in lower volumes and lost revenue. Meanwhile, operating expenses were up due to the higher cost of caring for patients with COVID-19, including the increased cost of PPE, pharmaceuticals and labor. By March, however, operations recovered across the system.
For the three months ended March 31, 2021, volumes as measured by case mix adjusted admissions were down 2 percent compared to prior year. Operating expenses were $6.7 billion, up 1 percent compared to prior year. Operating revenues were $6.4 billion, up 2 percent compared to prior year, driven by 9 percent growth in capitation revenue and 57 percent growth in diversified revenue.
Earnings before interest, depreciation and amortization (EBIDA) were $150 million, or 2.3 percent of operating revenues, for the first three months of 2021, compared with $59 million and 0.9 percent for the first three months of last year. The net operating loss was $222 million for the first three months of the year, compared with a loss of $276 million for the same period in 2020.
“Providence has been on a journey to transform health care for the future. The strategic investments we have made in digital innovation, population health, acute care, ambulatory care, our physician enterprises and home care have uniquely positioned us to respond to the pandemic while ensuring we can extend our Mission to more people in need,” said Providence CFO Greg Hoffman.
In other important highlights, Providence contributed $400 million in community benefit during the first quarter of the year, with the unpaid costs of Medicaid totaling $270 million for the three months ended March 31, 2021.
“The past year has been a challenging time for everyone but together we are emerging from the crisis resilient and transformed. With the dedication of our caregivers, the strategies we have in place and the support of our communities, I have never been more confident in the future of our organization and am excited to continue meeting the health needs of our communities for years to come,” Dr. Hochman said.
Providence is a national, not-for-profit Catholic health system comprising a diverse family of organizations and driven by a belief that health is a human right. With 52 hospitals, nearly 1,000 physician clinics, senior services, supportive housing and many other health and educational services, the health system and its partners employ and nearly 121,000 caregivers serving communities across Alaska, California, Montana, New Mexico, Oregon, Texas, and Washington, with system offices in Renton, Wash., and Irvine, Calif. Learn about our vision of health for a better world at Providence.org.