Providence Rebounds, Almost Halving its 2024 Losses

Higher volumes, better reimbursement rates and more efficient labor spending helped the health system bounce back.

Providence has made an impressive rebound in its Q4 2024 reports.

The Seattle-based non-profit health system reported higher volumes, better reimbursement rates and more efficient labor spending, all of which helped to cut its 2024 operating losses nearly in half.

Earlier this month Providence reported an operating loss of $644 million (-2.1%) across 2024. This is a big improvement on the $1.7 billion operating loss, and a grim -4.1% operating margin, that the health system saw at the end of 2023. This loss included $183 million in “reconstruction costs related to asset rationalization, employee reductions and other items,” according to the report.

Across the health system, operating revenues grew 7% year over year to $30.7 billion (5% when excluding a $426 million net gain in the first quarter). The report highlighted that this growth was spread across all operating categories.

Net patient service revenues also grew, rising 7% due to improved rates and higher volumes. This was helped by a 3% decrease in acute patients’ length of stay “due to improved access to post-acute care.”

Pro forma operating EBITDA for fiscal year 2024 and deficit of revenues over expenses from operations, excluding restructuring costs, were $989 million and $461 million, respectively. This represented a $487 million improvement from the prior year and an improvement of close to $1 billion in the last two years.

This improvement comes despite several struggles throughout the year related to regulatory changes, strikes and lower-then-expected Medicare rate increases.

 “Meanwhile, all core operating metrics continued to improve,” the report also noted. “Notably, agency spending was 70 % lower than the peak in 2022 and case mix adjusted length of stay returned to pre-pandemic levels.” 

The system also saw robust investment gains of $488 million for fiscal year 2024, bringing total unrestricted cash and investments to $8.2 billion as of December 31, 2024.

“We are proud that Providence continues to serve more people in need year over year even as macroeconomic and regulatory pressures continue,” Providence CFO Greg Hoffman said in a press release. “While we have made significant progress on our renew and recovery strategies post-COVID, we are not taking it for granted and are practicing continued operational focus and discipline to ensure long-term sustainability, which will position the ministry to thrive for years to come.”

The Cost of Strikes

One of Providence’s biggest hurdles was its nurses’ strikes, which cost the health system an estimated $25 million a week for 2,000 replacement nurses to replace the more than 4,000 who went out on strike. The strike by nurses with the Oregon Nurses Association (ONA) against Providence began on January 7 and ended on February 24, 2025. Nurses were able to ratify their contracts, ending the strike that lasted nearly six weeks.

CFOs should note the costly repercussions of strikes and work to ensure they can be prevented. To avoid strikes, CFOs should prioritize a stable workforce by supporting employee well-being, and addressing burnout through tools and programs that benefit nurses and physicians in their daily tasks.