Dive Brief:
- * Providence said it has closed all 27 of its retail clinics in Southern California, citing macroeconomic pressures and lower patient volumes than anticipated. The clinics closed to patient care Thursday.
- * “The national healthcare labor shortage, inflation, global supply chain disruptions, lower than budgeted volumes, and a highly competitive retail health industry have resulted in unprecedented operating losses for Providence ExpressCare retail clinics in Southern California,” a spokesperson for the Washington-based system said in an email Monday.
- * The closing of the retail clinics should not limit patients’ access to care, the spokesperson said. ExpressCare Virtual services will remain available in California, and patients will also be able to receive same-day care services through other options in their communities, including urgent care clinics, walk-in clinics and primary care, the spokesperson said.
Dive Insight:
Like most of its hospital peers, Providence has faced a difficult year marked by soaring labor costs and supply inflation. The nonprofit posted an operating loss of $424 million in the second quarter as it relied more on higher-cost agency staffing.
Weak financial markets have also taken a toll, and the system recorded a loss when it removed Hoag Hospital from its balance sheet after the Southern California-based facility disaffiliated from Providence in January. That brought Providence’s total net loss to $5.2 billion in the first half of the year.
The closure of the Southern California clinics is the latest move by the Catholic system to shore up its financial position. In July, Providence announced a restructuring of its operations with a reduction in its management ranks.
As one of the largest nonprofit hospital operators in the U.S. with 51 hospitals and more than 900 outpatient sites across seven states, Providence has been focused on expanding in Southern California. In September, the system announced plans to break ground on a new patient tower and two new medical centers in the region, which is its largest market by revenue.
The patient tower will add about 100 beds to an existing facility, Providence Mission Hospital in Orange County, and add an ambulatory surgery center on its campus. Construction is expected to begin late next year and take about five years to complete.
The two new medical centers, in San Clemente and Rancho Mission Viejo, will offer high-acuity urgent care services, imaging, primary care and other specialty services.
The Providence spokesperson said Monday that the system is working with the employees of the shuttered clinics to transition them to open positions elsewhere in its operations, adding that it is confident there are jobs for the medical assistants and advanced practice clinicians who choose to remain in its network.