In response to recent inaccurate news coverage about funding Providence has received from the Coronavirus Aid, Relief, and Economic Security (CARES) Act, we are sharing this important context to help the public understand the impact of COVID-19 on our services.
- Providence was significantly impacted by COVID-19 with more than 1,200 positive cases to date. We have also been dealing with the crisis longer than other U.S. health systems, having received the first confirmed patient in the country.
- In Q1 of 2020, Providence lost $276M as a result of our COVID-19 response. Then, in April alone, we lost $179M even with support from CARES. This was driven by the increased costs associated with caring for COVID-19 patients along with $503M in lost net services revenue due to suspending non-emergent surgeries per government orders and declines in other patient volumes.
- The hospitals that are part of the Providence family of organizations received $509M in CARES Act funding. This represents 0.8 percent of total CARES dollars distributed. When spread across our 51 hospitals, the funding translates to an average of $10M per hospital, which puts us on par with what was received by the other hospitals mentioned in the article.
- Additionally, the Providence system includes several rural and critical access hospitals. All 51 of our hospitals accept patients regardless of their ability to pay.
- We continued to pay our caregivers as normal through the end of April even if their programs or services were closed, which cost more than $500M. In addition, we offered temporary benefits, such as 80 hours of emergency PTO and $100/day for childcare.
- Providence is deeply committed to caring for those who are poor and vulnerable. In some parts of Washington State, for example, more than 70 percent of our patients depend on government programs for health insurance or are uninsured. Each year, we invest more than $1.5 billion in community benefit. In Q1 of this year alone, we provided $450M in community benefit, including $281M in unpaid Medicaid costs. Our investments in the health of those we serve are described in detail in our 2019 annual report to our communities.
- Providence operates on very narrow margins of 0 to 1 percent, so we can’t count on operating income for viability. Unrestricted cash, which includes assets that are not easily liquidated, is our financial foundation. If we had to sustain our operations on this, it would only last six months due to the cost of operating our facilities 24/7, 365 days a year.
- The pandemic isn’t over, and we need to be financially stable to handle the next potential wave. With uncertainty in the economy and unemployment, we anticipate more patients will be uninsured.
- Our investment losses in March were $763M. We are seeing some of this return but it’s still uncertain what will happen with the markets through the rest of the year.
- Regarding the Providence Venture Fund, we made a strategic decision to invest in innovation because traditional health care providers are ripe for disruption, and we need to stay ahead of the curve to ensure our future. This is critical to needed health care transformation. While we have set aside $300M, we have only invested $100M to date.
- Providence executives are taking reduced pay this year. Our CEO as well as our president of operations both volunteered to take 50 percent pay cuts, while other executives are taking 10 to 20 percent reductions. Because IRS Form 990 reporting requires that we report data that isn't received as take-home pay, Dr. Hochman’s salary as reported in the article is not accurate.
- Learn more about our Q1 financial performance in this news release, which reflects the full scope of our COVID-19 response.
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