Renton, Wash.-based Providence ended the first quarter of this year with an operating loss, as patient volumes declined and expenses increased due to the COVID-19 pandemic.
The 51-hospital system reported revenues of $6.3 billion in the first quarter of this year, up from $6 billion in the same period a year earlier, according to unaudited financial documents. Net patient service revenue, premium revenue and capitation revenue increased year over year.
The health system's expenses also increased. For the first quarter of this year, Providence reported operating expenses of $6.6 billion, up 10 percent year over year.
"The health system made significant investments in front line care to ensure readiness for the actual and predicted surge in COVID-19 cases," Providence said in a news release. "This included continuing to pay its caregivers as normal through the month of April even if their programs or services were closed, as well as offering emergency paid time off, child care subsidies and other temporary benefits. Providence also worked diligently to shore up supplies of personal protective equipment for its caregivers, even if that meant paying higher prices due to the intense global demand and severe shortages."
Reduced patient volumes in the second half of March combined with increased operating costs drove a first-quarter operating loss of $276 million. In the first quarter of 2019, Providence reported an operating loss of $4 million.
Providence recorded investment losses of $763 million in the first quarter of this year due to market volatility related to the COVID-19 pandemic. A year earlier, the health system reported investment gains of $582 million.
Providence ended the first quarter of this year with a net loss of $1.1 billion, compared to net income of $543.3 million in the same period of 2019.
To help offset financial damage, Providence received $509 million in federal grants made available under the Coronavirus Aid, Relief and Economic Security Act. The health system said that even with the $286 million in federal grants recognized in April, it saw an operating loss of $179 million that month due to sharp declines in patient volumes.
"Time and time again, the caregivers of Providence have risen to the occasion when our communities have needed us most, and our response to COVID-19 is no exception," said Providence President and CEO Rod Hochman, MD. "Our Mission has endured for more than 165 years, and thanks to the extraordinary efforts of everyone at Providence, we will continue to respond to the times and be of service to our communities for many decades to come."
In the first quarter of this year, the health system invested $450 million in community benefits. Those investments focused on housing, food insecurity, mental health and substance use and other social determinants of health.