Renton, Wash.-based Providence is making progress on several key initiatives to "deconstruct and diversify healthcare" by investing in areas including non-acute care, IT services and technology platforms, according to financial documents published May 17.
The 51-hospital system is growing its value-based care platforms and leveraging its capabilities in Medicare Advantage, management said in a discussion of its most recent financial results. MA provides coverage to more than 51% of the nation's seniors, almost 31 million people.
CMS' expansion of the two-midnight rule could affect more than 20% of MA patients this year and has contributed to increased inpatient volumes and revenue for many hospitals in the first quarter, according to Strata Decision Technology.
Providence Medicare Advantage Plans recently returned to Orange County, Calif., with several "affordable and comprehensive benefits" aimed at improving the health and well-being of Medicare-eligible adults. Providence Health Assurance is providing 2024 coverage to residents featuring $3,100 to cover dental-related expenses and reduced pharmacy costs — all in a $0 premium plan, according to the health system.
"We've made changes to our Medicare Advantage plan to make benefits more attractive and relevant for area residents," Shannon Drotning, market president, consumer and specialty, Providence Health Plan, said in an Oct. 17 news release. "The population of people on Medicare continues to grow in Southern California and is expected to double by 2050, which means it's more important than ever to ensure we're providing the quality coverage Medicare beneficiaries need to stay active, happy and healthy."
The health system also aims to grow value-based care initiatives with other payers, particularly in California. It plans to expand capacity to meet growing needs across many of its non-acute service lines — including ambulatory, home and community care — and continues to evaluate growth and capitalization opportunities.
Providence said its diversification strategy is driving success from early investments in data-sharing company Truveta, nonprofit drugmaker Civica Rx and Providence Ventures, the health system's venture capital arm.
"In addition, our Tegria Holdings and Ayin Health Holdings, Inc. divisions continued to drive appreciable revenue growth while creating scalable platforms across IT and population health services, and products for clients and future partnerships," according to the health system. "This includes plans to scale our technology capabilities through Providence Global Center to offer advanced health care solutions to other healthcare providers."
Providence said this new revenue stream will supplement patient revenues while advancing its vision by supporting other health systems and their communities.
"We continue to monetize investments to support the long-term growth and sustainability of the Providence Mission," the health system said in its financial report.
Providence posted a $176 million operating gain (2.3% margin) in the quarter ending March 31, a significant improvement on the $345 million operating loss (-5.1% margin) reported in the first quarter of 2023.