Providence St. Joseph Health swings to profit on higher patient volumes
- Providence St. Joseph Health announced this week that it had operating income of $3 million for 2017, an improvement over 2016 when the health system had an operating loss of $255 million.
- The non-profit hospital system is reportedly in talks to merge with St. Louis-based Ascension.
- Providence St. Joseph pointed to higher patient volumes driven by outpatient visits (5%) and higher acuity within the acute setting (4%) as drivers for the growth.
The hospital system also reported revenues jumped 5% over the previous year to $23 billion, with $1.6 billion spent on community benefit.
The financial report noted the system plans to vigorously lobby for "protecting and advancing gains in health insurance coverage with a special emphasis on Medicaid and Medicare." Providence St. Joseph said that despite the 10-year Children's Health Insurance Program extension, it does not "expect government reimbursement to keep up with industry costs."
The repeal of the Affordable Care Act's individual mandate in 2019 will also contribute to a rise in the uninsured by several million, "leading to poorer health and the need for free or subsidized care," according to Providence St. Joseph.
"Uncertainty about the scope of government-sponsored insurance and levels of reimbursement was significant in 2017, and we expect these trends to continue into 2019, as governments face budgetary restraints," the report states.
On the other hand, the hospital system pointed to the tax overhaul passed by the GOP in 2017 maintaining the nonprofit hospital's access to tax-exempt debt as one critical tool enabling it to manage infrastructure costs.
The report says the expansion of the hospital group's ambulatory network will lead to a lower cost structure and greater efficiencies in specialized outpatient facilities, noting that it expects volume and complexity of surgical cases performed in outpatient settings will "continue to steadily increase."
- Providence St. Joseph Health Management's Discussion and Analysis of Financial Condition and Results of Operations, Year ended December 31, 2017
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