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Providence Health sees strong Q1 revenue, larger surplus


By Rachel Landen
Posted: May 15, 2014 - 2:45 pm ET
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Even as acute-care volumes fell short of budgeted expectations, Providence Health & Services reported stronger revenue for the first quarter of 2014 and a net surplus that beat 2013's full-year results.

The not-for-profit Catholic system reported $50.9 million in net surplus for the period ended March 31, up 86.5% from the $27.3 million earned in the year-ago period. The results outpaced the $37.7 million in total net surplus that Providence reported at the close of fiscal 2013 as flat inpatient volume and an adverse payer mix stripped away gains for the year.

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Quarterly revenue for the Renton, Wash.-based system rose 5.5% to $2.9 billion from $2.7 billion in the first quarter of 2013. The increase came despite a 2.5% drop in inpatient admissions. However, primary care and continuum services—long-term care, hospice, housing, assisted living and home health—saw some improvements in number of visits over the prior year.

Primary-care visits for the first quarter were up 12% over the previous one. Growth of Providence's primary care and alignment with physician partners is a top strategic priority for the system, according to its latest financial report.

Revenue also stayed higher even as the continued delay in Washington's provider tax program reduced Medicaid funding by $10 million. Medicaid revenue for the quarter increased $73 million as patients shifted from self-pay to Medicaid expansion programs and as additional Medicaid funding from provider tax programs in Oregon and California boosted top-line results. These programs are designed to increase Medicaid funding through provider taxes and matching funds, but the federal version is still awaiting final CMS approval.

Follow Rachel Landen on Twitter: @MHrlanden


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