- Providence's operating loss more than doubled to $714 million in 2021 from $306 million a year earlier as the impact of the pandemic beset one of the country's largest health systems for a second year.
- Operating expenses climbed 8% for the year as the Renton, Washington-based system treated more patients and sicker patients who required a higher level of care than in 2020, it said Wednesday.
- Like other providers across the nation, Providence was forced to juggle the increased patient demand from both COVID-19 surges and non-COVID-19 care all while dealing with labor shortages.
The cost of salaries and benefits continued to accelerate for many providers across the healthcare sector as they struggled to attract and hire enough staff to care for patients amid the resurgence of COVID-19.
Spending on salaries and benefits in 2021 increased more than 10% compared with a year earlier as the nonprofit company faced higher wages, overtime costs and increased fees paid to agencies that provide staffing.
Staffing agencies have come under fire for charging high prices for providing traveling nurses to hospitals at a time when most are in great need. The American Hospital Association accused them of "exploiting" the nursing shortage and previously called on the White House to investigate the "exorbitant" rates.
Federal relief funds have helped offset these financial headwinds, but many systems including Providence received less financial help in 2021 than a year earlier.
As Providence grapples with climbing expenses, the company has said it's exploring ways to diversify revenue to support patient-care operations. Providence operates 52 hospitals in seven states and primarily in the western region of the U.S.
The aim to diversify revenue is part of a new strategic plan dubbed Destination Health 2025, Providence said in its statement. Although the system didn't provide many specific details about the program, it added that the plan "serves as a roadmap for improving health and transforming health care and ensuring the financial strength of the Mission far into the future."
Net income fell 30% to $518 million from $740 million in 2020 even as the system posted investment gains of $1.2 billion.