The West Penn Allegheny Health System posted a $114.9 million operating loss in the fiscal year ending June 30, 2012, more than double the previous year's deficit, according to an auditor's report released Monday.
With a combined $28 million in investment income and donations, the health system -- now part of Highmark Health Services' Allegheny Health Network -- reported an $84.75 million loss for the year, compared with a $20.4 million profit in fiscal 2011 aided by Highmark's $50 million infusion after the two parties announced their planned affiliation.
In October, West Penn Allegheny Health System released unaudited numbers that showed a $37.8 million loss for fiscal 2012. Spokesman Dan Laurent on Monday declined comment on the report or why the actual loss was so much higher than the unaudited figure reported last fall.
Comparing the two reports, the biggest discrepancy was under "gifts and donations" -- where the unaudited report listed $58.6 million in gifts and donations, the audited account stated it was only $14.1 million. Also, there was an additional $8.8 million "restructuring" expense added to the audited report.
The 2012 results, audited by KPMG, can be viewed at www.dacbond.com under the "View Disclosure Documents" tab.
The numbers illustrate just how dire West Penn Allegheny's financial straits were before being rescued by Highmark, a deal that gained final approval by state regulators in April -- nearly two years after the proposed affiliation was first announced. Upon approval by the Pennsylvania Insurance Department, Highmark acquired $604 million in outstanding WPAHS bonds.
The KPMG report also report noted that, in addition to operating losses that have continued with a $99 million operating loss through March of the current fiscal year, "WPAHS has experienced a significant decline in volumes within a challenging service area that includes significant competition and declining demographics."
Steve Twedt: email@example.com or 412-263-1963.