Issue link: https://beckershealthcare.uberflip.com/i/1479669
9 CFO / FINANCE Providence's operating loss grows to $934M as it shrinks leadership team By Ayla Ellison P rovidence, a 51-hospital system, ended the first six months of this year with an operating loss, according to financial documents released Aug. 15. For the six months ended June 30, the health system reported revenue of $12.7 billion, up 2 percent year over year on a pro forma basis. The pro forma results exclude the operations of Newport Beach, Calif.-based Hoag Hospital. Providence and Hoag ended their affiliation in January. Providence's expenses also increased. For the six months ended June 30, the health system reported operating expenses of $13.6 billion, up 8 percent year over year on a pro forma basis. Higher wages, increased agency staffing costs and overtime pushed Providence's labor costs higher year over year, the system said in an earnings release. Providence ended the first two quarters of this year with an operating loss of $934 million, compared to an operating loss of $94 million in the same period a year earlier. The system's second-quarter operating loss totaled $424 million. Providence, which has system offices in Renton, Wash., and Irvine, Calif., released its financial results a month after announcing a plan to shrink its leadership team and roll out a new divisional structure. "Creating a more sustainable model of health care by 2025 has been a key part of our vision since before the pandemic," Providence CFO Greg Hoffman said in the earnings release. "But it has become even more imperative today as health systems across the country face a new reality. Alongside our investments to simplify processes and modernize technology, streamlining our leadership and administrative structure is another way we will ensure we are operating as efficiently as possible, so that we can keep resources focused on direct patient care, especially for those who are most vulnerable." For the six months ended June 30, Providence invested $1 billion in community benefit, compared to $813 million in the same period of 2021, according to the earnings release. "Having served the Western U.S. for more than 165 years, Providence has lived through other economic downturns, past pandemics, and periods of political and social unrest. With the steps we are taking to respond to the times, we will continue supporting caregivers and serving our communities throughout these challenging times, with the mission of Providence enduring for generations to come," Providence President and CEO Rod Hochman, MD, said in the earnings release. n St. Jude's largest expansion yet to create 2,700 jobs, double hospital campus By Hayley DeSilva M emphis, Tenn.-based St. Jude Children's Research Hospital announced it will increase funding for its study and treatment of pediatric catastrophic diseases by $1.4 billion, bringing the total for its six-year strategic plan to $12.9 billion. e expansion will also create 2,300 new jobs and double the hospital's campus in the next decade, according to a press release shared with Becker's. It is the largest expansion in the hospital's history. Additionally, the expansion allows for increased global treatment for "low- and middle-income countries." e hospital found that children in these areas have a cancer survival rate of under 20 percent, whereas 80 percent of U.S. children with the same conditions are able to be cured. "Even before last year's strategic plan launch, we began to explore the possibility of further expanding the budget and staffing numbers," said James R. Downing, MD, St. Jude Children's Research Hospital president and CEO. "Working with internal and external subject-matter experts we developed a proposal for opportunities where a larger investment would help accelerate research and treatment for childhood catastrophic diseases. With these increases, we are better positioned to build on the outlined plan, as well as capitalize on emerging technologies and discoveries." e strategic research and treatment plan first rolled out in July 2021, its success leading to the expansion. n Image Credit: St. jude children's research hospital