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Tuesday, Mar 5, 2024

Providence Outlays Hurt Bottom Line

System reports loss of $510M in first three months of 2022.

An annual report released by Providence Health & Services showed that it spent $1.9 billion on uncompensated care and other community benefit initiatives last year as the health system continues to contend with financial challenges.

The figure is $366 million more than Providence’s pre-pandemic levels of spending on uncompensated care. 

Rod Hochman

“Whether through financial assistance, telehealth, research, community clinics, education, housing, food banks, advocacy or disaster relief, we continued to meet the diverse needs of the dear neighbors in our communities,” Rod Hochman, Providence’s chief executive, said in a statement. 

Providence is a not-for-profit health system with a presence in the Valley region. It operates Providence Holy Cross Medical Center in Mission Hills.

One of the ways Providence allocated money to local community efforts was through a $125,000 grant given to North Valley Caring Services, the largest single-site food distribution center in the Valley region. The grant was used to hire a social worker and case manager, who are tasked with connecting people who lack a primary care provider with health and social services.

Despite the generous spending put toward uncompensated care, Providence is, like many other hospitals in the country, still reeling from the financial stressors brought on by the COVID-19 pandemic.

The health system reported in its first-quarter results this year that reimbursement did not keep pace with the increased cost of patient care, resulting in a net operating loss of $510 million for the first three months of the year.

Providence Chief Financial Officer Greg Hoffman said the remainder of the year may be the biggest challenge yet but maintained the belief that the health system could turn its finances around.

“At Providence, we remain deeply committed to our communities and our caregivers and have charted a course to recovery that will allow us to navigate the headwinds and emerge from these challenging times stronger and transformed,” Hoffman said.

Antonio Pequeño IV
Antonio Pequeño IV
Antonio “Tony” Pequeño IV is a reporter covering health care, finance and law for the San Fernando Valley Business Journal. He specializes in reporting on some of the biggest names in the Valley’s biotechnology sector. In addition to his work with the Business Journal, Tony has reported with BuzzFeed News on the unsupervised use of Clearview AI, a controversial facial recognition technology. Tony, who also conducts freelance reporting, graduated from the USC’s Master of Science in Journalism program in 2021. He is in his fifth year as a journalist as of 2021.

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