Providence Names New CEO

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Name: Erik Wexler

Previous title: Chief operating officer, Providence

New title: President and chief executive officer, Providence

Wexler was tapped for the chief executive role after eight years with the Renton, Washington-based nonprofit health system.

He joined Providence from Tenet Healthcare in 2016, serving first as chief executive for Providence’s Southern California region, according to Wednesday’s news release. Wexler then became the president of operations and strategy for its southern region in 2020, before being promoted to COO in 2022.

Wexler will step into the chief executive role beginning in 2025, where he will oversee Providence’s portfolio of 51 hospitals across seven states.

He will succeed Rod Hochman, who said in May he plans to retire following a 45-year healthcare career, including 17 years with Providence. 

Wexler will be responsible for continuing Providence’s financial turnaround efforts, which have taken on critical importance after the operator posted net losses for the past two years. Most recently, Providence recorded a net loss of nearly $600 million for fiscal year 2023. 

Providence isn’t the only nonprofit health system to struggle since the COVID-19 pandemic. Ongoing labor shortages and inflationary pressures have driven expenses up, while difficult relations with payers have pressured providers’ earnings across the sector in recent years, depressing operating margins.

The health system reported some financial progress during its first quarter of 2024, ​​posting a net income of $360.3 million on improved capacity management, stronger admission volumes and improved reimbursement rates.

Providence also made progress on reducing its expenses — notably cutting contract labor costs by 42% year over year by the first quarter of 2024. 

However, the system likely isn’t fully out of the woods. Providence’s operating margin for the first quarter was 2.3% — below the 3% operating margin that credit rating agency Fitch Ratings says healthy systems typically need to cover their financial obligations. 

Meanwhile, the health system has also recently been rocked by scandal, after it disclosed that more than 2,000 patients may have been exposed to possible infections including HIV and hepatitis B and C after a physician failed to follow proper safety protocols at Providence hospitals.