- Providence posted a net loss of $1.1 billion and operating loss of $276 million for the first quarter of 2020, drastically down from a net gain of $543 million and operating loss of $4 million in the first quarter of 2019 as the COVID-19 pandemic has slashed financial operations for providers across the country.
- The Catholic nonprofit system saw investment losses of $763 million as stock market volatility followed stay-at-home orders in March and April for much of the United States. That compared to a $582 million investment gain in the prior-year period.
- Patient volumes dropped as Providence suspended non-emergency procedures amid the pandemic. Surgeries declined 8%, total outpatient visits dropped 3% and acute patient days were down 5%, according to a financial report filed late last week.
Providence Regional Medical Center in Everett, Washington, was the first to knowingly treat a COVID-19 patient in the United States — on Jan. 20. Since then, cases have plateaued, with the rate becoming “more manageable” throughout the communities Providence serves.
The system suspended elective procedures the week of March 16 and saw telehealth appointments skyrocket from an average of 50 visits per day to more than 12,000. “Now, the critical path forward is reopening services safely so that we can get back to patients who have delayed their care,” Providence CFO Venkat Bhamidipati said in a statement.
Providence reported receiving $509 million from the Coronavirus Aid, Relief, and Economic Security Act and $1.6 billion in accelerated Medicare payments. The system tapped $800 million in private credit lines as well. As of the end of the first quarter, Providence had 182 days cash on hand, down slightly from the prior-year period.
The hospital operator is far from alone in reporting steep first-quarter losses, and ratings agencies predict the second quarter will not be kind to nonprofits either.
So far, the system has not imposed layoffs but has cut overtime and seen voluntary furloughs and executive pay cuts. “If patient census and revenue does not return to anticipated levels, we would also consider involuntary options,” according to the filing.
Providence’s operating EBIDTA margin was down to 0.9% in the first quarter of this year from 5.5% in the first quarter of 2019.
Operating expenses increased 10% to $6.6 billion, driven by increases in labor costs and supplies. The system noted paying “significantly higher” premiums to obtain personal protective equipment and increased costs for ICU medications amid the pandemic.
The filing discloses a complaint under the California Corporations Code from earlier this month. It was filed by two of the three corporate members of Hoag Hospital, seeking to dissolve the third member and remove Hoag as an obligated group member. Providence states it “believes that the complaint is without merit, and believes the legal process will vindicate this position.”
The 51-hospital system created by the 2016 merger of Washington-based Providence and California-based St. Joseph is coming off a 2019 surplus of $1.36 billion, swinging to the black from 2018’s deficit of $445 million.