Providence reports results for third quarter 2021

Providence reports results for third quarter 2021

Amid surging COVID-19 volumes, Providence continued to support its caregivers and meet the health care needs of its communities.

RENTON, WASH. Nov. 15, 2021Providence, one of the largest health systems in the U.S., today released results for the third quarter 2021. The report showed a resurgence of COVID-19 volumes, with many Providence service areas hitting ICU census levels comparable to last winter and several service areas experiencing their highest COVID-19 census to date. In continuing to meet the tremendous need, Providence saw volumes as measured by case mix adjusted admissions increase 9% compared with the same period in 2020.

“With the Delta variant spreading through our communities and large segments of the population still unvaccinated in Q3, we experienced volumes that tested the limits of many parts of our health system. Yet, we were able to respond to the needs thanks to the dedication of every caregiver across the Providence family of organizations. We have continued to be here for our communities when they have needed us most, which would not be possible without the people of Providence. We are deeply grateful for all they do to care for those in need, especially those who are most vulnerable,” said Providence CFO Greg Hoffman.

Amid surging COVID-19 volumes and a national shortage of health care personnel, Providence continued to focus on supporting its caregivers. In September 2021, the health system announced a workforce investment of more than $220 million that will roll out across several months to reward, retain and recruit top talent. Key components include recognition bonuses for caregivers; sign-on and referral bonuses to accelerate hiring; and increases in base pay for lower paid positions. In addition, Providence continued to advance long-term strategies to enhance and simplify the caregiver experience, such as a new enterprise resource planning system, improved digital tools for onboarding and optimizations to the electronic health record.

Providence also hit a key milestone for keeping caregivers and patients safe. In its five states with COVID-19 vaccine mandates, the health system reported a compliance rate of 99%, meaning 99% of caregivers in those states received the vaccine or received a medical or religious exemption.

“Getting vaccinated remains one of the safest, most effective ways to prevent serious illness and death from the virus. We are grateful that the majority of caregivers across the Providence family of organizations have now received this level of protection. It has required tremendous mobilization across our workforce, as well as education and personal reflection. Thank you to everyone at Providence who took this critical action,” said Providence President and CEO Rod Hochman, M.D.

For the first nine months ended Sept. 30, 2021, operating revenues were $20.2 billion, an increase of 7% compared with same period in 2020. Meanwhile, operating expenses were $20.6 billion, up 8% compared with the prior year. This includes a 10% increase in salaries and benefits due to higher wages, increased agency staffing costs and overtime. Providence absorbed the increased cost of responding to the pandemic even as reimbursement did not keep up. This led to a net operating loss of $311 million for the quarter ending Sept. 30, 2021, bringing the net operating loss for the first nine months of the year to $405 million.

Earnings before interest, depreciation and amortization (EBIDA) were $724 million, or 4% of operating revenues, for the first nine months of 2021, compared with $817 million and 4% for the first nine months of last year. CARES grant offsets were primarily driven in the comparable performance period.  In the nine months ended Sept. 30, 2021, Providence recognized $170 million in CARES grants compared with $682 million the prior year. In neither period did the CARES grants sufficiently cover the incremental expenses and lost revenues from addressing the pandemic.

Providence also contributed $1.3 billion in community benefit during the first nine months of the year, compared with $1.2 billion for the same period in 2020.

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About Providence
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, more than 900 physician clinics, senior services, supportive housing and many other health and educational services, the health system and its partners employ and more than 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.