Providence's operating loss shrinks to $94M through the first half of the year

Providence, a 52-hospital system in Renton, Wash., saw its operating loss shrink through the first six months of 2021, when compared to the same period last year, according to its most recent earnings report

Providence posted an operating loss of $94 million in the first half of 2021, compared to an operating loss of $221 million recorded in the first half of 2020. 

Total operating revenue for the six months ending June 30 reached $13.4 billion, up from the $12.5 billion recorded in the same period one year prior. Providence said it recognized $170 million in federal relief funding in the first half of 2021. 

The health system also saw its expenses rise to $13.5 billion in the first half of 2021, up 6 percent compared with the prior year. Providence said that the increase in expenses included a 20 percent increase in agency staffing costs to address the national labor shortage.

After factoring in nonoperating gains of $815 million, Providence posted a net income of $721 million through the first half of the year. In the same period last year, Providence recorded a net loss of $538 million. 

Providence said that a rise in non-COVID-19 volumes through the first half of the year helped it improve operational performance and drive higher net patient revenue. But the increase in volumes and acuity of its patients drove higher expenses. It also noted that the system is now seeing another surge. 

"The reprieve from COVID-19 cases allowed us to focus on other health needs, including care that had been delayed due to state orders, capacity or voluntarily by patients. However, we are once again seeing a surge of infections due to the Delta variant," Rod Hochman, MD, president and CEO of Providence said in the Aug. 13 news release. "Providence is committed to helping everyone in our communities get vaccinated against the virus. This will not only help protect one another, it will also ensure our nation’s health providers, including Providence, have the capacity to meet the myriad of other health needs in our communities."

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