Some Pennsylvania hospitals on rocky financial footing

Costs top revenues for over a dozen

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More than a dozen regional hospitals ended fiscal 2013 with costs exceeding revenues, including three — UPMC East in Monroeville, West Penn Hospital in Bloomfield and Highlands Hospital in Connellsville, Fayette County — whose percentage losses reached double digits.

The new data, released today in the Pennsylvania Health Care Cost Containment Council’s annual financial analysis, paint a troubling picture of acute care hospitals’ financial health as 35 percent of the state’s 169 facilities landed in negative territory.

In a statement, Joe Martin, executive director of PHC4, pointed to reduced reimbursement payments for government programs such as Medicare and Medicaid as one reason for the decline, while the total number of days patients spent in the hospital decreased for the sixth consecutive year.

“Hospitals dependent on income sources they do not control are in the challenging position of relying on a volatile stock market and charitable giving, or finding other revenue sources to remain fiscally healthy,” Mr. Martin said.

The report by the independent state agency is available online at www.phc4.org.

UPMC officials attribute the 17.34 percent operating loss at their Monroeville facility — the biggest loss in the region — to startup costs at UPMC East, which opened in July 2012. The PHC4 report is based on data from the facility’s inaugural year.

Spokeswoman Susan Manko noted the new facility had a higher average daily census and surgical volume than projected for its inaugural year, and twice the expected emergency department visits.

Four hospitals at the competing Allegheny Health Network operated at a loss — West Penn (-11.33 percent), Canonsburg General (-7.59 percent), Forbes Regional in Monroeville (-5.65 percent) and Allegheny Valley in Natrona Heights (-1.67 percent).

AHN spokesman Dan Laurent said the losses at these hospitals, all part of the West Penn Allegheny Health system that was acquired by Highmark last year, “are well documented and again point to the importance of our affiliation with Highmark.”

“As our recent financial disclosures have shown, we are making significant progress in strengthening the financial position of our hospitals and expect future PHC4 reports to further reflect those efforts,” he said.

The network’s flagship hospital, Allegheny General on the North Side, recorded a positive 1.29 percent operating margin.

Other hospitals with negative operating margins, where the hospital’s costs exceeded its revenue, were: Highlands Hospital, Connellsville, Pa. (-14.81 percent); Southwest Regional Medical Center in Waynesburg (-7.31 percent); Ohio Valley General Hospital, Kennedy (-5.15 percent); UPMC Mercy, Uptown (-4.93 percent); Excela Health Westmoreland Hospital, Greensburg (-2.98 percent); Heritage Valley Beaver (-3.16 percent) and Heritage Valley Sewickley (-1.52 percent); Excela Health Frick Hospital in Mount Pleasant, Westmoreland County (-1.44 percent); Uniontown Hospital (-1.27 percent); and Latrobe Area Hospital (-0.5 percent).

Hospitals with the most robust operating margins included Magee-Womens Hospital of UPMC in Oakland (13 percent); UPMC Passavant in McCandless (6.83 percent); St. Clair Hospital in Mt. Lebanon (5.63 percent); ACMH in Kittanning, Armstrong County (4.85 percent); Butler Memorial Hospital, Butler County (4.46 percent); and Washington Hospital, Washington County (4.31 percent).


Steve Twedt: stwedt@post-gazette.com or 412-263-1963.

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