Providence Reports Q2 2023 Results
RENTON, Wash., August 18, 2023 – Providence, a not-for-profit health system serving the Western U.S., today announced results for the three months ended June 30, 2023. The report showed an increase in patient volumes, coupled with diligent management of length of stay and use of agency nurses. As a result of these and other strategies, Providence reported significant improvement in Q2 compared to the prior quarter as EBIDA grew and net operating losses narrowed.
“External pressures – including inflation, the shortage of health care personnel and an increase in denials or delays in reimbursement – have persisted well into 2023. That is why we continue to stay the course on our strategies for recovery and renewal. These efforts are making an important difference, and together with the caregivers of Providence, we are improving our overall operating performance and continuing to meet the growing health needs of our communities,” said Providence CFO Greg Hoffman.
Some of Providence’s key strategies include a continued focus on retention and recruitment as the health system works to reduce overall reliance on costly agency staffing. Other steps include addressing discharge challenges related to staffing shortages in community-based post-acute facilities, as well as a continued focus on increasing surgical capacity to meet vital health care needs. Last year’s reduction in executive leadership roles, as well as efforts to renegotiate payment rates with commercial insurers have also helped Providence shore up resources for patients and caregivers.
Providence’s patient volumes increased during the six months ended June 30, 2023, with net patient revenues up 12%. Meanwhile, the cost of pharmaceuticals was 10% higher than the prior year while medical supplies increased 9%. At the same time, salary and benefit expenses were up 5%.
In the second quarter, operating EBIDA was a positive $208 million and net operating losses were $202 million, representing improvements of $289 million and $222 million respectively compared to the same period last year and a $182 million improvement in EBIDA from prior quarter. Additionally, a financial market rebound drove investment gains of $103 million for the three months ended June 30, 2023, bringing Providence’s total unrestricted cash and investments to $8.9 billion.
Despite the challenges, Providence’s commitment to its Mission has not wavered. For the six months ended June 30, 2023, the health system provided $1 billion in community benefit. This includes $726 million in the unpaid costs of Medicaid for the six months ended June 30, 2023, compared with $718 million for the same period in 2022.
“Ensuring everyone has access to health care, regardless of ability to pay, is central to our commitment to serving all in need, especially those who are most vulnerable. I am incredibly proud that our investment in community benefit continues to increase. Thank you to everyone at Providence who makes this possible. Together, we will ensure the Mission of Providence continues to thrive for generations to come,” said Rod Hochman, M.D., Providence President and CEO.