Providence's operating loss swells to $405M through Q3

Renton, Wash.-based Providence saw its operating loss grow through the first nine months of the year, according to its financial report released Nov. 15. 

In the nine months ending Sept. 30, Providence posted a $405 million operating loss, including a $311 million loss from the third quarter alone. In the same period last year, the health system recorded an operating loss of $214 million.

In the nine months ending Sept. 30, Providence recorded operating revenue of $20.2 billion, an increase of 7 percent compared to the same period in 2020. 

While revenue rose, expenses for the 52-hospital system also increased to $20.6 billion through the first nine months of 2021, up 8 percent compared to the same period a year prior. Providence said the expense increase includes a 10 percent boost in salaries and benefits, expenses from higher wages, agency staffing and overtime. 

The health system attributed its operating loss to increased expenses and a boost in responding to a COVID-19 surge in many of its service areas.

"Providence absorbed the increased cost of responding to the pandemic even as reimbursement did not keep up," Providence said.  

After factoring in nonoperating gains of $953 million, Providence ended the first nine months of the year with a net income of $548 million. In the same period in 2020, Providence recorded a net income of $49 million. 

"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," said Providence CFO Greg Hoffman. "Yet we were able to respond to the needs, thanks to the dedication of every caregiver across the Providence family of organizations."

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