Renton, Wash.-based Providence posted an operating loss of $208 million (-2.7% operating margin) in the third quarter of 2024, an improvement from a $319 million operating loss (-4.3% margin) recorded during the same period last year, according to its Nov. 26 financial report.
The system reported operating revenues of $7.6 billion for the three months ended Sept. 30, a 5.7% increase over the same period last year. Providence said the increase was driven by higher patient volumes and improving rates.
Operating expenses totaled $7.8 billion in the third quarter, a 4.1% increase year over year. Providence said its higher patient volumes drove the increase in operating expenses, primarily in higher labor and supply costs. Salaries and benefits increased 4% year over year. Supply expenses increased 8%, driven by a 12% increase in pharmaceutical costs.
For the nine months ended Sept. 30, Providence reported an operating loss of $155 million (-0.7 margin), an improvement from an $857.3 million operating loss (-4% margin) over the same period last year. Through the third quarter of 2024, the system recorded a net income of $309.6 million, up from a net loss of $613 million over the same period in 2023.
Providence CFO Greg Hoffman told Becker's in August that the health system has been "very focused" on reducing agency spend. Agency contract labor has decreased 39% year over year through the first nine months of 2024.
Mr. Hoffman also said the system's improved operating performance has been guided by its transformation initiatives, which have included utilizing an AI scheduling tool that allows the system to proactively release block time. 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.