Providence made another substantial dent in its annual operating losses as it pared back non-core service, reduced its headcount and treated more patients, the 51-hospital nonprofit disclosed Thursday.
In a financial filing and accompanying release, the organization reported an operating loss of $132 million for the year ended Dec. 31, 2025, an improvement over the prior year’s $363 million operating loss and well ahead of the deficits it had logged over the past several years.
Its bottom line remained roughly the same, a $238 million net loss, due to slightly lessened investment income and $354 million attributed to the system’s restructuring costs (described in the filing as “asset rationalization and employee reductions, and other items related to restructuring initiatives”).
The West Coast Catholic nonprofit said it reduced headcount by about 5,000 across 2025 between its divestitures and multiple rounds of layoffs, leaving the organization with over 120,000 employees.
The organization’s leadership, echoing recent comments, said the past year’s changes have helped set Providence on the path to operating stability in 2026 and beyond. Case in point, the most recently closed fourth quarter also brought the system’s second sequential quarter of operating gains ($97 million) after normalizing for the restructuring costs and other items.
“Our results reflect not only improved operating performance but also an intentional strategy to transform our operating model,” President and CEO Erik Wexler said in a release. “Over the past year, we have integrated previously siloed functions, streamlined leadership structures, and refined and focused our portfolio on core services, allowing us to direct more resources to the front lines of patient care.”
Across the year, Providence outlined a 4% increase in inpatient admissions and a 3% rise in case-mix-adjusted admissions. Total outpatient visits rose 2% after normalizing for the system’s home and community care divestures.
The year’s total operating revenues of $29 billion were a 5% increase over 2024, but a 6% rise when excluding funds from both years tied to divestitures and other one-time gains. The revenue growth, fueled by volumes and improved rates, hit all sides of the business with hospital revenues up 6% while physician and outpatient revenues rose 7%.
Operating expenses, on a pro forma basis, increased by 4% (5% when excluding divestitures) due in large part to the increase in volumes and a nurse strike in Oregon early on during the year. Supplies expenses rose 9% year-over-year, which Providence said it offset through its expense management initiatives and labor productivity improvements.
For the fourth quarter alone, Providence noted a 4% year-over-year rise in case-mix-adjusted admissions that fueled a 6% jump in net patient revenues. These outpaced volume-related operating expense increases due to labor productivity improvements and a 6% decline in length of stay.
Providence said it has improved its days cash on hand by 14 days from the third to the fourth quarter to 99 days, which will “help accelerate Providence’s strategy and investments in local communities in 2026.”
Its release also called out $2.1 billion of community benefit invested during 2025, up from 2024’s $1.9 billion. This year’s tally includes nearly $1.3 billion of unpaid Medicaid costs and $407 million of charity care.
“Throughout 2025, our teams demonstrated strong financial discipline and operational focus,” Greg Hoffman, chief financial officer of Providence, said in a release. “We managed expenses responsibly, improved productivity and continued to enhance the efficiency of our care delivery. These efforts helped us navigate reimbursement, regulatory, inflationary and workforce pressures while supporting high-quality care for the communities we serve.”
Providence has previously signaled plans to increase its employees’ collective pay by over $600 million in 2026, an increase Wexler said at the time was possible due to “the difficult choices we made in 2025.”
More recently, the system disclosed that it is “exploring strategic options” for its subsidiary Providence Health Plan, including asset sales. This week’s financial listing notes that a sale is expected to be completed in the 2026 fiscal year, subject to regulatory approval.
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