Providence endures another credit downgrade

Posted on by • Posted in Credit Downgrade, Credit Quality, Credit Ratings, Health System, Hospital, Hospital Industry, Net Income, Nonoperating Income, Operating Expense Reduction, Operating Expenses, Operating Income, Operating Margin, Operating Metrics, Operating Performance • Leave a comment
https://www.beckershospitalreview.com/finance/providence-endures-another-credit-downgrade.html?origin=CFOE&utm_source=CFOE&utm_medium=email&utm_content=newsletter&oly_enc_id=2893H2397267F7G

Renton, Wash.-based Providence suffered its third credit downgrade in less than three weeks when Moody’s revised a rating on bonds the 51-hospital system holds to “A2” from “A1.”

Such a rating reflects an expectation margins will remain weak in 2023. The outlook is negative.

The move follows similar actions by Fitch Ratings March 17 and S&P Global March 21 amid an anticipated multiyear process of financial recovery.

Capital expenditure for Providence is expected to be restricted after the completion of a couple of major projects this year to effect “margin recovery,” Moody’s said.

Providence reported a $1.7 billion operating loss in 2022.

Virginia Mason lays off over 300 administrative staff

Posted on by • Posted in Employee Layoffs, Health System, Hospital, Hospital Industry, Labor Spend Management, Operating Expense Reduction, Operating Expenses, Operating Margin • Leave a comment
https://www.beckershospitalreview.com/finance/virginia-mason-lays-off-over-300-employees.html?origin=CFOE&utm_source=CFOE&utm_medium=email&utm_content=newsletter&oly_enc_id=2893H2397267F7G

Tacoma, Wash.-based Virginia Mason Franciscan Health has laid off more than 300 administrative employees, the Puget Sound Business Journal reported April 4. 

The job cuts affected less than 2 percent of the health system’s 19,000-plus workforce.

“Like many healthcare providers in the Pacific Northwest, we are experiencing tremendous financial strain caused by a number of factors, including lasting impacts from the COVID-19 pandemic, inflation and labor shortages,” Kelly Campbell, vice president of marketing and communications, told the Journal.

Affected employees will be eligible for career transition assistance, extended benefits and severance programs, according to the report. 

Virginia Mason, which includes 10 hospitals and nearly 300 care sites, said it is focused on improving efficiencies and reducing costs in response to financial headwinds.

In 2022, Washington hospitals reported a total net loss of more than $2.7 billion, compared to a $1.2 billion loss in 2021, while their net operating loss was $2.1 billion, up from $742 million in 2021. 

“We’re very concerned that access to this specialized care, the highest level of care, and in many cases, the life-saving care is threatened by unsustainable financial losses as hospitals are resorting to extraordinary means to close the gaps in their budgets,” Cassie Sauer, president and CEO of the Washington State Hospital Association, said in a March 21 media briefing.