High labor costs and a struggling financial market, coupled with a broken merger, have dealt a billion-dollar blow to Providence’s 2022 financial performance.
The Catholic nonprofit health system posted a net loss of $6.12 billion in 2022, compared with a profit of $517.84 million in 2021. Results released Thursday include a loss of $517.84 million. losses of $3.41 billion related to Providence’s separation from the Southern California Hoag health system, effective January 2022. totaling approximately $1 billion for the year.
Providence also suffered $246.64 million in restructuring costs, stemming in part from asset reorganization and job cuts. Last year, the health system streamlined operations, cutting seven regional divisions to three and reducing operating staff in an effort to direct more resources to frontline workers.
The annual operating loss was $1.7 billion.
Annual operating revenue fell 3.3% to $26.43 billion, including a 3.9% drop in patient services revenue. The system has approximately 33,000 fewer inpatient admissions by 2022. Inpatient procedures decreased by 3.2% and outpatient procedures by 6.9%.
Wage and benefit expenses rose 2.6% to $14.33 billion, although total operating expenses fell less than 1% to $27.89 billion.
Washington-based Renton, Providence has 51 hospitals and more than 1,000 clinics spread across seven states.
Providence is not alone in its financial woes. Ohio’s Cleveland Clinic reported a loss of more than $1 billion in 2022. Oakland, California-based Kaiser Permanente posted a net loss of $4.5 billion for the year. The Mayo Clinic in Rochester, Minnesota, posted a $2.2 billion profit, but that’s down more than 50% from the previous year.
