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July 20, 2022 03:39 PM

Providence cuts leadership team, operations to save money

Caroline Hudson
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    Providence, a Washington-based not-for-profit health system, is shrinking its executive team and streamlining some functions as it faces operational challenges.

    Providence cited worker shortages, inflation, supply chain disruptions and limited insurance reimbursements as reasons for the changes. The system will reduce overhead costs with fewer executives and funnel more financial resources toward frontline staff, equipment and supplies, a spokesperson said.

    The new operating model condenses Providence's seven regional divisions into three. Erik Wexler, formerly president of strategy and operations for Providence's southern regions, will oversee the divisions as chief operating officer. Lisa Vance, president of strategy and operations for northern regions, announced her retirement a couple of weeks ago, prompting Providence to transition to one operations role, the spokesperson said.

    Providence, with 52 hospitals, more than 900 clinics and almost 120,000 employees across seven states, is also consolidating leadership for its physician enterprise, ambulatory care network and clinical institutes into one team. Dr. David Kim, who oversaw the physician enterprise business, will lead that team.

    A spokesperson said the health system primarily is looking at internal candidates for other divisional leadership roles. She did not provide details on how many executives would be moved into new roles or leave the system.

    Other cost-cutting strategies include managing patients' length of stay, reviewing real estate, reducing discretionary spending and diversifying revenue streams.

    Providence doubled its operating losses in 2021, compared with the prior year. In the first quarter, its operating expenses exceeded revenue by $510 million. It reported $330 million in non-operating losses, not including losses from ending its affiliation this year with Hoag, a California healthcare network. Hoag filed a lawsuit in 2020 to split from Providence, seeking to end a nearly decade-long partnership.

    Providence continues to recruit frontline workers, including registered nurses, as part of a $220 million workforce investment announced last year to fund bonuses for employees and recruitment efforts, according to a news release.

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    • News
      • Current News
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      • Transformation
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      • ESG
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      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Blogs
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      • HIMSS 2023
    • Opinion
      • Breaking Bias
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      • Letters
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - AI and Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
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      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
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