Providence CEO Susan Stacey: Inland Northwest system to ‘break even’ by 2028

After losing tens of millions of dollars each year since the COVID-19 pandemic, Providence Sacred Heart Medical Center plans to break even by 2028, its CEO said in an interview last week.

The news followed Providence’s announcement earlier this month that it would close several orthopedic physical therapy clinics in Spokane and Stevens County as part of a broader cost-savings plan.

Here is a conversation with Providence Inland Northwest CEO Susan Stacey on the financial difficulties and future of Providence in Spokane.

The conversation has been edited for brevity and clarity.

Spokesman-Review: Providence recently announced the closures of Providence orthopedic physical therapy clinics in Spokane and Chewelah. Why were these specific clinics chosen for closure?

Stacey: The last five years have had unprecedented losses for health care, and we are not an exception to that. We are continuing to lose money, and that is not sustainable for us. In 2023, we lost $140 million collectively in Spokane and Stevens County. In 2024, our loses were $89 million. That is significant progress, but it is not enough. We continue to be challenged with headwinds with our payers (insurance companies, Medicare, Medicaid and other people and groups who pay the hospital), as well as skyrocketing expenses.

We have to continue to find ways to become more sustainable so that we serve our patients. We evaluated these programs through the lens of what is available in the community. We can share this with our community partners who do this (orthopedic) work really well and allow us to stay focused on those services that only we provide.

S-R: How much will these cuts save Providence, and how much will they improve Providence’s financial outlook?

Stacey: These program closures, both Dominicare in Stevens County and the two clinics in Spokane County, will result in between $1.5 and $2 million of annual savings for the service area. Additionally, we reduced several administrative positions, and will save about an additional million dollars in those reductions as well.

S-R: Based on the level of deficits Providence is facing, should your patients in the Inland Northwest expect additional cuts of programs or services in the near future?

Stacey: The next couple of years are going to be really challenging, and like any business, we’re going to look at our operations – at how we can continue to make health care more affordable than it is right now, and reduce our expenses. We’ll continue to evaluate our programs as we go along.

S-R: What is the plan to get Providence out of the financial hole you are in right now?

Stacey: It’s continuing to do the work that we’ve been doing. We’ve been working with our payers, reducing our expenses, partnering with our medical contracts for supplies – that we get the best prices that we can for the supplies we use every day. It is a combination and really looking at our own discretionary spending.

Frankly, what we’ve done over these last three years to get these costs down, we’ve made substantial improvements. Going from $140 million loss to $89 million loss, that’s significant.

S-R: How long will it be before Providence is sustainable and not losing tens of millions of dollars each year?

Stacey: My goal is in the next two years we get things turned around and can move forward. And while we’re doing reductions, we are also looking at investments. It’s not just about cutting, it’s also about growing intentionally and smartly in certain areas. But my goal is by 2028.

S-R: To clarify, the goal is for Providence to be break even by 2028?

Stacey: It’s a reasonable goal in these next two or three years to break even. And that’s with the current situation. There may be unknowns.

S-R: What would you say to Providence patients who are concerned their care could be impacted?

Stacey: We remain committed to our mission and taking care of this community. It is the most important thing for us to be there for folks when they need us most.

Note: Providence closed several orthopedic physical therapy clinics. Previously this article did not specify what kind of orthopedic clinic closed.