Providence Health System, a nonprofit health system based in Renton, Washington, has reported an operating loss of $208 million in the third quarter of 2023. This loss is primarily due to increasing labor and supply costs.
Despite this setback, Providence's operating revenues for the third quarter increased by 5.7% compared to the same quarter last year, reaching $7.6 billion. This growth was driven by higher patient volumes and improved reimbursement rates. However, operating expenses also increased, mainly due to higher labor and supply costs.
Providence's leadership has highlighted the improved operating results in the third quarter, with increased patient volumes and enhanced reimbursement rates. Inpatient admissions, case mix adjusted admissions, acute adjusted admissions, physician visits, and home health visits all saw positive growth compared to the previous year. Providence's operating EBIDA for the third quarter was reported at $165 million, representing an improvement compared to the previous year.
Despite the positive revenue growth, Providence continues to face challenges such as a shortage of healthcare personnel and rising costs of drugs and supplies. The organization is committed to its "renew and recover" strategies to improve operating performance. Providence is also actively pursuing strategies to reduce accounts receivable and enhance cash flow. The organization remains optimistic about its ability to navigate the challenges in the healthcare landscape and is focused on improving access to post-acute care, reducing costs, and improving service delivery.
Providence's commitment to compassionate, high-quality care and its mission to serve vulnerable populations remain strong. The organization has a robust financial foundation, with total unrestricted cash and investments amounting to $7.8 billion for the nine months of 2024.