The week that was: 02/09/14

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'Challenging' health market

West Penn Allegheny Health System (now part of the Highmark-owned Allegheny Health Network) and UPMC both issued quarterly statements last week. Over at WPAHS, the system lost $2 million on operations for the October-December period, compared with a $33 million loss for the same quarter a year earlier. Six-month losses were down, too -- but so were the number of hospital inpatient admissions, dropping from 27,845 in the last six months of 2012 to 27,006 in 2013.

UPMC, which issued its quarterly report the next day ($58 million in operating income; growing inpatient admissions and observations, thanks partly to UPMC's acquisition of Altoona Regional Hospital), used the occasion to repeat what it's been saying for two years: It doesn't intend to sign a new contract with Highmark. UPMC also used the quarterly report session to challenge AHN's long-term health, noting WPAHS "did not meet even worst-case projections for net patient revenue and unrestricted cash," according to the PG's Steve Twedt.

All roads lead to Pittsburgh

That massive Target security breach? The one that compromised the credit card data of millions of Christmas shoppers? Yep, it may have started here, traced to the cybertheft of information from a Sharpsburg-based heating, air conditioning and refrigeration company," reports the PG's Deborah M. Todd and Teresa F. Lindeman. Fazio Mechanical Services Inc. has now been swept up in the sprawling federal investigation, and is cooperating with both Target and U.S. Secret Service, the company said in a statement. Authorities believe that "hackers used network credentials stolen from Fazio to break into Target's network."

Quote of the Week

"We don't need to put public dollars behind big box. They'll come. What we need to do is to build up the population that will shop there and then the retail would never need public subsidy."

-- Pittsburgh Mayor Bill Peduto, calling for 20,000 new Pittsburgh residents over the next 10 years. Though the city has an abundance of old housing stock, the newcomers, he said, will want new housing, particularly in the North Shore, South Side, the Strip District, and Homewood.

Good news, bad news?

Or good news, good news? Unemployment in the Pittsburgh metropolitan area fell from 6.6 percent in November to 6.3 percent in December, says the PG's Ann Belser. But that drop was largely attributable to the shrinking regional labor force, which dropped by an estimated 4,200 workers, to 1.25 million. "It was the fifth straight month that the labor force contracted," suggesting some people are just giving up on finding work. But hold on -- most of those labor force departures aren't by discouraged, able-bodied workers, but boomers who are retiring: "The decline in the participation rate in the last one-and-a-half years -- when the unemployment rate declined faster than expected -- is entirely due to retirement," writes Shigeru Fujita of the Federal Reserve Bank of Philadelphia.

That's true nationally, not just in Pittsburgh.

In case you missed it ...

... visit www.post-gazette.com/business/ for the latest headlines and all of the business stories you might have missed, including Kim Lyons' piece about the new taxilike ride-share service known as Lyft, which is starting service in Pittsburgh this month. Only one problem: If the "cab" driver doesn't have commercial insurance, the entire enterprise might be illegal.

Bill Toland: btoland@post-gazette.com or 412-263-2625.


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