Providence Health & Services, Oregon’s largest private-sector employer, is preparing an aggressive cost-cutting campaign that will include layoffs.
The move is clearest sign to date that hospitals face a difficult, uncertain future.
Providence saw its financial position deteriorate markedly in 2016, posting an operating loss of more than $255 million, filings show. Though its annual revenue topped $22 billion and, as a non-profit, it pays no income taxes, Providence is looking to cut costs across its seven-state network, multiple sources say. David Underriner, chief executive of the medical provider’s Oregon operation, would not disclose numbers or locations, but did say, “there will be an impact on people.”
Providence has already cut back in Oregon. Last year, it closed its open-heart surgery program at Providence Portland Medical Center and consolidated that work at St. Vincent’s Medical Center on the city’s westside, Underriner said.
Providence is not alone. St. Charles Health System in Bend has also scaled back spending as its own bottom line suffered in 2016. Oregon Health & Sciences University in Southwest Portland announced a hiring freeze in March.
The new financial weakness comes at a time of high anxiety in health care. A bill to foist a new multi-million-dollar provider tax on hospitals—which would help fund the state’s contribution to Medicaid — was signed into law this week. In Washington, D.C., meanwhile, Senate Republicans continue their efforts to repeal the Affordable Care Act, a move that Providence’s Underriner and many other hospital executives oppose.