Providence plans $712M Southern California expansion

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Providence is planning a $712 million expansion to add to its footprint in southern California.

The Washington-based health system said Monday it will break ground on a new patient tower and two new medical centers to meet the growing demand for services in the region.

The patient tower will add about 100 beds to an existing facility, Providence Mission Hospital in Orange County. The tower will also enhance its neuroscience, cardiovascular and maternity services, Providence said in a statement released Monday. Construction will begin late next year and is expected to take about five years to complete, the health system said.

Providence will also build an ambulatory surgery center on the hospital campus.

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 southern California region is Providence’s largest market by revenue, according to its latest financial statement.

The region generated nearly 28% of the health system’s operating revenue for the first six months of the year.

In April, both Fitch Ratings and S&P Global Ratings downgraded Providence, citing a weaker financial profile in part due to its separation with Hoag, a nonprofit health system with two acute care hospitals in southern California. Hoag represented 7% of Providence’s operating revenue, according to Fitch.

The expansion announcement follows Providence’s plan to restructure and slim down its leadership team amid persistent operating challenges.

For the first half of the year, the health system reported a $934 million operating loss due to pricier labor and supply costs.

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