Providence St. Joseph sees operating revenue climb 5% in 2018

Renton, Wash.-based Providence St. Joseph Health saw operating revenue increase in fiscal year 2018 but ended the period with a net loss.

The nonprofit Catholic health system — which has locations in California, New Mexico, Texas, Oregon, Montana, Washington and Alaska — recorded operating revenue of $24.4 billion in the year ended Dec. 31, 2018, up 5 percent from $23.2 billion in the same period a year prior, according to recently released financial documents.

The increase was largely attributed to growing patient volumes. Year over year, Providence St. Joseph reported a 4 percent rise in case mix adjusted admissions, an 8 percent rise in primary care, specialty care and retail visits, and an increase of about 10 percent in home health visits. 

The system's operating expenses rose to $24 billion in 2018, a 5 percent increase from the year prior. Providence St. Joseph said the rise in expenses was primarily driven by costs associated with serving higher volumes, restructuring charges and changing payment adjustments related to the California provider tax program.

After factoring in expenses, Providence St. Joseph ended 2018 with pro forma net operating income of $165 million, up $263 million from the previous year.

But the system said the fourth quarter downturn in the equities market affected its finances last year. Providence St. Joseph reported nonoperating losses of $448 million for 2018 compared to gains of $777 million the year prior. The system said the market rebounded the first quarter of 2019, and it is seeing positive investment returns so far.

After factoring in investment losses, Providence St. Joseph ended 2018 with a net loss of $445 million compared to net income of $780 million the year prior.

The system said in a news release that it is making financial improvements  by accelerating a strategic plan to modernize operations and transform care delivery. Additionally, the system is investing in various business lines, including its ambulatory care network, a new population health management company, a home and community care division, physician enterprises and digital innovation.

The system also is investing in technology and recently acquired Lumedic, a revenue cycle management platform.

"Our vision — health for a better world —  is driven by a belief that health is a human right. Extending our mission to more people in need requires us to deliver strong operating results while at the same time pursuing transformative strategies that will shape the future of healthcare. PSJH struck that important balance in 2018," said Providence St. Joseph CFO Venkat Bhamidipati.

 

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