Providence Health posted an operating loss of $222 million for the first quarter due to higher expenses and a decline in patient volumes.
But the loss was offset by non-operating gains of $307 million for the quarter thanks to strong investments, according to an earnings report released late Monday.
The 52-hospital system was hit hard by a surge in cases of COVID-19 in the first part of the quarter, but operations started to return to normal by the end of March.
“We’re turning a corner and seeing signs of renewal,” said Providence President and CEO Rod Hochman in a statement.
Providence saw a 2% decline in patient volumes for the quarter compared to the year before, leading to operating revenues of $6.4 billion.
However, the system’s operating expenses increased by 1% to $6.7 billion “due to the higher cost of caring for patients with COVID-19, including the increased cost of [personal protective equipment], pharmaceuticals and labor,” the report said. “By March, however, operations recovered across the system.”
The biggest cost increase was salaries and benefits that increased by 5% compared to the first quarter of 2020. Hospitals across the country have faced higher costs to get temporary staff to preserve enough capacity to fight the virus.
Medical supply costs per case-mix adjusted admission were also up by 4% in the quarter.
Providence’s earnings before interest, depreciation and amortization were $150 million for the quarter compared with $59 million for the first quarter of 2020.
The system still has $180 million in deferred revenue deriving from $1.1 billion in federal provider relief funds.
Hospital chains have posted mixed results for the first quarter of 2021 as they still struggle with lingering patient volume declines due to the pandemic. Some for-profit systems such as Tenet have been able to generate profits for the quarter thanks to higher acuity while others have posted losses.