Providence Closes Home Companionship Program, Tied To Medicaid Cuts In Obba

Providence St. Joseph Health, a national faith-based health system, has closed its non-medical home companionship program, citing an anticipated annual loss of $500 million in Medicaid funding due to the One Big Beautiful Bill Act (OBBA).

The Providence family of organizations announced cuts of 255 jobs in Washington and Oregon, including caregivers associated with the closure of its non-medical home companionship program called Providence DominiCare, located in Chewelah County, Washington. These layoffs are in addition to the 600, mostly administrative, roles the organization laid off earlier this year, according to a June announcement.

Providence also announced the closure of three outpatient physical therapy clinics in Stevens and Spoke Counties.

The organization will reassign individuals to other positions where possible and provide transitional resources to those affected, according to Providence.

“We do not take decisions like this lightly and recognize that behind every role is a person, colleague, friend and caregiver whose contributions have helped carry out our mission,” Providence Chief Operating Officer Dr. Darryl Elmouchi said of the June reductions. “These difficult but necessary steps are part of a comprehensive approach to financial stability that will enable our family of organizations to better reinvest in and revitalize the front lines of care, including the people, programs, equipment and facilities needed to serve our communities.”

Providence operates 51 hospitals and more than 1,000 clinics across seven states and employs more than 125,000.

In its Q2 2025 results report on Tuesday, the health system announced that operating revenues of $8 billion were 3% higher year-over-year, driven by increased volumes and improved commercial rates, while operating expenses were up 2%. The system also announced improvements in labor productivity due to continued focus on staffing and reductions from expense management initiatives.

“Thanks to the dedication of all our caregivers and the discipline we are bringing to our sustainability initiatives, we’re seeing meaningful improvements in our performance, bringing us closer to breakeven,” Providence Chief Financial Officer Greg Hoffman said in a statement. “At the same time, the passage of the [OBBBA] and other external pressures continue to challenge the entire health care sector. These headwinds reinforce the urgency of our transformation and our commitment to adapt, so we can sustain our mission and ensure continued access to high-quality care in the communities we serve.”

Providence is not the only major player in the industry that has reduced staff due to legislative challenges.

In June, Bayada Home Health Care reduced its headquarters staff by 10% or approximately 100 jobs. The company stated that the layoffs were the result of operating in a challenging reimbursement environment. 

Bayada provides home health, home care, hospice and behavioral health care services in 23 states, as well as several other countries.

The passage of the OBBBA on July 3 included projected Medicaid cuts of $1 trillion over the next decade. 

“These sweeping reductions will limit health services; lead to care delays and longer wait times, especially in emergency departments; and place undue strain on overburdened health care providers,” a Providence statement from July read. 

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