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Financial update: Our work in South Puget Sound continues

Published Date

*For all acute core leaders and caregivers across South Puget Sound and Medical Staff* 

We have made great strides in improving our efficiency, reducing our discretionary spending, holding non-clinical replacement positions where appropriate, and reviewing clinical and non-clinical programs. Thank you for your effort and adaptability; I greatly appreciate your support during these challenging times. We must transform the way we provide care for our communities.  

But the painful truth is – we aren’t out of the woods. See President and CEO Erik Wexler’s message on the implications of the passage of H.R.1, commonly known as the One Big Beautiful Bill.  

It’s crucial I convey the urgency of our situation to you. Providence Swedish – like many health care systems across the U.S. – continues to feel the very real financial challenges. The mix of inadequate and delayed reimbursement from insurers, state and federal legislative cuts and taxes, rising supply and operating costs, fluctuating patient volumes and surgical cases continue to affect everything we do and every decision we make.  

In South Puget Sound we’re assessing all options and scenarios, and we’ll keep you updated as decisions are made. Several initiatives remain to grow inpatient volumes, improve throughput while reducing our expenses. Examples include: 

  • Staffing nursing units according to our Hospital Staffing Committee-approved matrices submitted to the state. This staffing committee is focused on nursing ratios. 

  • Continue hiring efforts for areas with high agency, overtime and callback utilization to bring permanent staff on board, reduce burnout and improve engagement. 

  • Actively working to increase referrals to improve our surgical and procedural volume.    

  • Improved capacity management of our paneled patients within our Medical Group. 

  • Decreasing our length of stay to top quartile performance measured by the geometric mean length of stay (GMLOS) observed over expected (O:E) ratio. Impressive work year to date to match industry benchmarks at St. Peter that should also have an improvement in our quality initiatives. Centralia already meets benchmark standards and is continuing this hard work.   

  • Focus efforts on increasing patient admissions and streamlining operational processes to achieve full utilization of Providence Centralia Hospital facilities and services. 

  • Working to continue optimizing expense management strategies. 

 
Our ask of you 

Please take a close look at the work you do every day. If operations are not meeting full potential, let us know so we can help. Please work with your core leader on ways to make the work more efficient and productive in your area. Not all ideas will work, but all are welcomed and encouraged.   

 
Providence system updates 

Last week, Providence Chief Financial Officer Greg Hoffman sent an important system update to executive leaders about how critical the coming weeks are, and I wanted to provide a summary for you. Here’s what his message covered: 

  • Given the many tough external challenges, Q1 closed with only 86 “days of cash on hand” for Providence. We need to significantly boost this by the end of the year. “Days of cash on hand” is an important metric because it shows how many days an organization can keep running using only the cash it has, without any new income coming in. 

  • H.R. 1 is new federal legislation that gravely affects important health programs like Medicaid. The Congressional Budget Office says this law could lead to 11.8 million more people being uninsured by 2034. 

  • Moody's downgraded our credit rating but stabilized our outlook, attributing issues to external factors. 

  • We’ll continue working together on our sustainability plan: maintaining the hiring pause for administrative roles, reducing extra spending, boosting productivity and key metrics, meeting budget goals with new performance benchmarks, expanding access to increase revenue, and preparing for difficult decisions regarding program changes.  

By concentrating on our primary mission of delivering health care to everyone in our community, I'm confident we can ensure a sustainable future for Providence Swedish in the South Puget Sound. 

 

Respectfully, 

Darin Goss 
Chief Executive 
South Puget Sound