Providence reduces operating deficit by $500M

Renton, Wash.-based Providence reported a $1.2 billion operating loss in 2023 — an improvement from a $1.7 billion operating loss in 2022, according to its March 7 financial report. 

Five things to know: 

1. Net operating revenues were $28.7 billion for the year ended Dec. 31, up 9% from 2022 and driven by higher volumes and improving rates. 

2. The system's operating expenses hit $29.9 billion in 2023, up 7% from 2022. Providence said this was driven by labor inflation and costs associated with serving higher patient volumes.  

3. Agency contract labor decreased 15% from 2022. Supply expenses increased 9 percent, driven by a 14% increase in pharmaceutical expenses and a 7 percent increase in medical supply costs.   

4. Providence saw non-operating gains of $575 million in 2023, compared with non-operating losses of $1 billion in 2022. The increase was driven by investment gains of $652 million for 2023 compared to losses of $1 billion in 2022. 

5. "Providence's caregivers have been diligently working to strengthen our financial recovery. We made positive progress in 2023, and it was good to see us end the year serving more people as access to care improved and length of stay decreased," CFO Greg Hoffman said in a March 6 health system news release. "Those are important markers on our journey toward sustained renewal."

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