Less than a month following the end of a financial spat with the University of Pittsburgh Medical Center over the costs of a new Lawrenceville home, Children's Hospital yesterday reported near-record earnings.

Children's outgoing Chief Executive Officer Ron Violi said net earnings for the region's sole pediatric specialty institution hit $19.7 million for the fiscal year ended June 30. That compares with earnings of $378,000 the previous fiscal year and nearly matched the $21.8 million record profit that Children's reported for the year ended June 30, 2001.

The robust financial results come just weeks following the conclusion of unusually public dispute between Children's and UPMC over costs of a new pediatric hospital and research complex that UPMC pledged to build as part of their 2002 merger agreement.

UPMC and Children's ended their dispute late last month by capping costs for the new pediatric complex, slated to open in 2008, at $473 million.

Violi at the same time agreed to step down from the hospital's helm by year's end but will remain head of its foundation. He had angered UPMC with public accusations that the Oakland-based medical behemoth was not living up to an agreement to build a world-class facility for Children's.

Violi, who took over Children's helm seven years ago after it posted the biggest loss in its history, said the latest financial gains reflected increases in admissions and outpatient activity that outpaced cost increases.

Roughly $16.5 million of last year's profits came from patient care, with the rest largely from investment gains. Payments from insurers also went up, he said.

Revenue rose 10 percent, to $355.6 million, for the latest year from $296.2 million a year ago.

In a brief interview, Violi defended the hospital's earnings in the face of rising health insurance costs. "We fit the definition of a nonprofit in a big way," Violi said, noting Children's reinvests the money it makes in clinical and research activities, as nonprofits are obliged to do by regulators.

The hospital also spent $20.2 million on free care in its latest fiscal year, down from $23.8 million a year earlier. Those totals include care given to children whose parents either have no insurance or are under-insured as well as what Children's calculates as the "shortfall' between its actual costs for certain care and the reimbursements it receives from insurers.

Asked if UPMC could tap Children's profits to pay for the pediatric complex under construction in Lawrenceville, Violi said, "It would be my feeling they can't." UPMC did not respond to a question about whether its merger agreement with Children's or the truce the two reached last month provides for that possibility.