Operating losses at the West Penn Allegheny Health System climbed to $112.5 million in the fiscal year ending June 30, more than double the previous year's total. And, although the health system saw a $40.7 million profit for the fourth quarter, it lost $37.8 million overall for the year.
The unaudited numbers were released by the health system today.
The $112.5 million operating loss compares with a $51.8 million operating loss in fiscal 2011, which followed a $63.1 million loss in 2010. Operating losses represent the amount the costs of running the hospitals outpace revenue.
Spokeswoman Kelly Sorice said that while losses increased from last year, "it also is better than the WPAHS results that Highmark projected to the Pennsylvania Insurance Department."
She said losses "are predominately due to much higher bad debt and lower revenue based on lower volume," particularly at West Penn Hospital, where costs have increased as officials reopened the emergency department and opened other units.
Insurer Highmark Inc. has committed to spend $475 million overall to support and upgrade the West Penn Allegheny system, which includes Allegheny General Hospital on North Side, West Penn Hospital in Bloomfield, Forbes Regional in Monroeville, Canonsburg General Hospital in Canonsburg, and Alle-Kiski Medical Center in Harrison.
The region's largest insurer hopes to have WPAHS atop its planned $1 billion integrated health care delivery system to compete with UPMC, although Highmark and West Penn Allegheny are currently in a court battle over whether West Penn Allegheny can entertain offers from other parties.
Highmark spokesman Aaron Billger said Monday that the company would not comment on the specifics of West Penn Allegheny's financial disclosure, but said, "Highmark has met all of the affiliation funding requirements and has funded more than $200 million of our commitment as outlined in the affiliation agreement. We also provided an additional $33 million in funding outside the commitment that was not required."
Steve Twedt: email@example.com or 412-263-1963.