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Dive Brief:
- Rising inflation, a national healthcare labor shortage, delayed payer reimbursement, supply chain disruptions and roiling financial markets drove nonprofit system Providence to post a net loss of $6.1 billion for its 2022 fiscal year, according to its financial results.
- The Washington-based system also posted a $1.7 billion operating loss in the same period.
- Operating revenues rose 4% but were outpaced by a 6% increase in operating expenses during fiscal year 2022 compared to the prior year.
Dive Insight:
Heightened expenses battered hospital operators last year amid rising inflation and ongoing workforce shortages.
Salaries and benefits expenses rose 8% last year for Providence as it spent more on agency staff, overtime and pay raises, according to a release.
The system spent $547 million more on agency and overtime expenses in 2022 than the prior year.
Supply costs also rose 7%, driven by an 8% boost in pharmaceutical expenses.
Increased workforce expenses, particularly premium labor costs, elevated length of stay due to lack of patient access to post-acute care and COVID-19 surges all impacted the 51-hospital system’s performance last year, it said in the release.
“Providence, like other health systems across the country, continued to absorb the increased cost of caring for patients even as revenue and reimbursement did not keep pace,” the system said.
Financial market weakness also drove $1 billion in investment losses during the year.
Providence did encounter several COVID-19 waves in 2022, with a larger peak occurring in the first part of the year, and two smaller waves of cases occurring in the second half of the year, according to the release.
The system’s full year operating revenue was $26.4 billion, down about 3% year over year.
Net patient service revenue increased 4% in 2022 compared to the prior year, driven by increased rates and overall volumes.
Volumes stayed mostly flat, with acute patient days and acute adjusted admissions both up 1.8% in 2022 compared to the prior year. Inpatient admissions remained flat compared to the prior year.