High labor costs and struggling financial markets, coupled with a broken merger, dealt a multibillion-dollar blow to Providence’s 2022 financial performance.
The Catholic nonprofit health system posted a $6.12 billion net loss in 2022, compared with a $517.84 million gain in 2021. The results posted Thursday included a $3.41 billion loss related to Providence’s split from Southern California health system Hoag, effective in January 2022. Investment losses totaled about $1 billion for the year.
Providence also took a $246.64 million hit from restructuring costs, stemming in part from asset reorganization and job cuts. Last year, the health system streamlined operations, cutting its seven regional divisions down to three and reducing its executive team in an effort to direct more resources to front-line workers.
The annual operating loss was $1.7 billion.
Annual operating revenue declined 3.3% to $26.43 billion, including a 3.9% dip in patient service revenue. The system had about 33,000 fewer inpatient admissions in 2022. Inpatient procedures were down 3.2%, and outpatient procedures decreased by 6.9%.
Expenses for salaries and benefits were up 2.6% to $14.33 billion, although overall operating expenses dipped less than 1% to $27.89 billion.
Renton, Washington-based Providence has 51 hospitals and more than 1,000 clinics spanning seven states.
Providence isn’t alone in its financial woes. Ohio’s Cleveland Clinic reported more than $1 billion in losses in 2022. Oakland, California-based Kaiser Permanente suffered a $4.5 billion net loss during the year. Mayo Clinic in Rochester, Minnesota, posted a $2.2 billion gain, but that was a more than 50% drop from the previous year.