The West Penn Allegheny Health System reported a net profit of $4.3 million for the first quarter of fiscal year 2010, its second consecutive quarterly profit. For the same period a year ago, the health system had a $16 million net loss.
The health system still reported an operating loss of $4.1 million for the three months ended Sept. 30, but even that's a marked improvement from the $17.3 million loss in the first quarter a year ago. The health system finished the quarter in the black because it made nearly $8.4 million in investment income.
Revenues were $419.1 million, a 4.4 percent improvement over the first quarter a year ago, despite an 8.1 percent dip in patient discharges.
Health system officials said they were "also considering making several selective physician practice acquisitions to increase patient volumes" in the analysis released yesterday.
"We realize that we still have much work to do to improve our operations, but we are certainly on the right path," said Christopher Olivia, president and CEO of West Penn Allegheny.
Just a month ago, Dr. Olivia pronounced the region's second-largest health system "financially stable" after recording a $2.1 million fourth-quarter profit that reduced its year-end net loss to $25.2 million.
Health system officials say West Penn Allegheny had the equivalent of 67.5 days' cash on hand as of Sept. 30.
In the past year, West Penn Allegheny has reduced by about 250 the number of full-time equivalent employees and restructured its pension benefit plan as cost-saving measures.
The health system is recovering from a $73 million write-down it had to take in early 2008, largely due to overly optimistic patient revenue estimates. In February, the Securities and Exchange Commission notified West Penn Allegheny Health System that it had launched a formal investigation into what happened. The investigation is still under way, and health system officials say they continue "to fully cooperate with the SEC."
Steve Twedt can be reached at firstname.lastname@example.org or 412-263-1963.