Providence posts $214M loss during first 9 months of 2020 due to COVID-19 impact

photo showing exterior of Providence St. Joseph Health hospital
Providence health system is on track to log 1.4 million video visits by the end of this year due to the COVID-19 pandemic. (Providence St. Joseph Health)

Providence health system reported a $214 loss for the first nine months of the year, as the system continues to recover patient volume that declined during the pandemic.

The 51-hospital not-for-profit system also gave an update on its patient volumes during a recent earnings release.

Providence posted operating revenues of $18.9 billion during the first nine months of 2020, but its operating expenses ballooned to $19.1 billion.

That was an increase of 4% compared to the same period in 2019.

“The increased expenses were largely driven by the higher cost of labor, supplies and pharmaceuticals needed to safely and effectively respond to COVID-19,” Providence said in a release.

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But the system is also fighting a major decline in patient volumes.

Hospital systems across the country faced plummeting patient volumes in March and April as COVID-19 spread across the country and facilities were forced to cancel or postpone elective procedures.

But even as patients started to return to the hospital in the spring and summer, volumes continue to be below pre-pandemic levels.

“Year-to-date volumes as measured by case mix adjusted admissions were 10% lower than the same period last year,” Providence said.

But a bright spot for the system has been its pivot to virtual care.

“We’ve dramatically ramped up virtual care and are on track to log 1.4 million video visits by the end of the year,” said Providence President and CEO Rod Hochman, M.D.

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The income loss also comes as Providence recognized $682 million in relief funding as part of a $175 billion fund passed by Congress as part of the CARES Act.

Providence also got help from a recovering stock market.

The system posted year-to-date, non-operating income of $263 million during the first nine months of the year, compared with $772 million during the same period in 2019.

“Non-operating income helps to recoup reimbursement shortfalls from Medicaid and Medicare coverage, allowing us to serve vulnerable populations while balancing our financial standing,” Providence said.