News Column

West Penn Allegheny narrows losses

February 4, 2014

By Alex Nixon, The Pittsburgh Tribune-Review

Feb. 04 -- West Penn Allegheny Health System narrowed its operating loss in the October-December as it boosted revenue and trimmed expenses, according to a quarterly financial statement released Tuesday. The five-hospital system, which was purchased on the brink of bankruptcy last year by health insurer Highmark Inc. , forms the core of the Allegheny Health Network system of hospitals and doctors that Highmark created to compete against UPMC. Highmark has pledged to turnaround West Penn Allegheny's finances over several years by increasing the number of patients using the system. It has said much of the new patient volume will come from UPMC, the largest hospital system in Western Pennsylvania . UPMC has refused to renew a reimbursement contract with Highmark, which sets less-costly in-network rates for Highmark members, because the insurer intends to steer patients away from UPMC. The current contract expires at the end of this year. West Penn Allegheny reported an operating loss of $2.1 million in the October-December quarter, the second quarter in the system's July-June fiscal year. In the same quarter the year before, the system had an operating loss of $33.1 million . Officials at the hospital network were not immediately available to comment. While financial performance appears to be improving, the quarterly result was surprising given previous comments by John Paul, CEO of Allegheny Health Network. Paul told employees in a memo in November that West Penn Allegheny had posted an operating profit of $4.5 million in October. "It's the first month in more than two and half years that West Penn Allegheny has experienced an operating profit," Paul wrote. The number of patients discharged from West Penn Allegheny hospitals in the quarter also dipped, to 13,244, compared with 13,686 in the same quarter the year before. Alex Nixon is a staff writer for Trib Total Media . He can be reached at 412-320-7928 or . ___ (c)2014 The Pittsburgh Tribune-Review (Greensburg, Pa.) Visit The Pittsburgh Tribune-Review (Greensburg, Pa.) at Distributed by MCT Information Services

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Source: Pittsburgh Tribune-Review (PA)

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