A shifting mindset for Providence

A shifting mindset for Providence unknown

Going back a decade, health systems like Providence "probably had a mindset where we needed to do everything ourselves," CFO Greg Hoffman told Becker's. 

Now the Renton, Wash.-based health system thinks "maybe others can do it better in partnership," he said. 

Mr. Hoffman said Providence been looking at how it can decouple and lean into partnerships. One recent example is the sale of its revenue cycle management company Acclara to R1 RCM. The closure of that sale in January also included a 10-year agreement for R1 to provide middle and back-end revenue cycle services for Providence. 

Acclara was a diversified income stream for the health system and was growing and sizable and generating a margin while doing great work, Mr. Hoffman said. 

"That being said, we noticed across the last couple of years that the underpayment and denials were going up over 50% in a two-year period of time, which led to the amount of touches per claim going up over 50% over that same time period," he said. "We just realized that we didn't have the scale that a partner like R1 had."

That gave Providence the incentive to explore a relationship. 

"R1's technology platform was years ahead of our own and it was an opportunity to catch up and lean into that technology."

In April, Providence sold Labcorp some of its laboratory business assets that were operated by its California medical groups, including ambulatory lab draw stations and an ambulatory laboratory facility and other equipment. 

"They were just more efficient, more cost effective for us," he said. 

Mr. Hoffman said these moves are part of Providence's initiatives to "deconstruct and diversify healthcare."