Renton, Wash.-based Providence saw a $600 million swing in operating performance between the first half of 2023 and the first half of 2024.
In the first six months of fiscal 2023, Providence reported an operating loss of $547 million (-3.9% margin). In the first half of 2024, the health system posted an operating income of $53 million (0.3% margin), according to its Aug. 21 financial report.
"First and foremost we've been very focused on reducing our agency spend," CFO Greg Hoffman told Becker's.
Agency contract labor decreased 40% in the first half of 2024 compared with the first six months of last year, according to the report.
Mr. Hoffman said the reduction is being led by "increased and improved retention of our caregivers as we ensure that we continue to provide career paths for many of our caregivers."
Providence's improved operating performance has also been guided by diving "head first" into its transformation initiatives, which Mr. Hoffman said "comes in a few different flavors."
"For example, in the area of AI, we found a partner that has a scheduling tool that allows us to proactively release block time," he said.
Providence began rolling out iQueue for Operating Rooms by LeanTaas at its Washington state and Montana hospitals in 2023 and has since expanded to other regions. Providence executives told Becker's in July that the system has achieved a 30% reduction in unused and unreleased block time after the implementation of the AI scheduling tool.
"There's a lot of pent-up demand in our communities, and it has allowed us to serve more with the same infrastructure that has been in place," he said.
Mr. Hoffman said Providence is also exploring a co-caring model, where virtual nurses, working from home, support bedside nurses and technicians by helping with administrative tasks like admissions, discharges, preprocedural checklists and medication reconciliation.
"It's been a game-changer for us as well," he said.
Providence has also received additional Medicaid funding for its Washington state hospitals through the Safety Net Assessment Program. The system's unpaid Medicaid costs totaled $533 million for the first half of 2024, "a significant decrease" from $726 million over the same period last year, Providence's financial report said.