News Column

Allegheny Health Network posts net loss

June 3, 2014

By David Bruce, Erie Times-News, Pa.



June 03--Saint Vincent Hospital's parent company, Allegheny Health Network, posted a $107 million net operating loss in 2013, its first full year of existence.

Highmark Health, which oversees both AHN and Highmark Inc., reported an operating loss of $186 million for the period, according to an audited financial report released Monday.

Part of Highmark Health's loss was a goodwill impairment charge of $311 million related to its acquisition of the West Penn Allegheny Health System.

"Allegheny Health Network has made progress in strengthening its financial position of the organization," said Karen Hanlon, Highmark Health's senior vice president of finance. "The results do not include a full year for each of the hospital affiliations from 2013, but rather a partial year based on the effective date of each affiliation as we move to align the organization on a calendar year."

Limited information about specific hospitals was provided in the report. Saint Vincent had $305.4 million in total assets and $285.2 million in total liabilities when it joined AHN on July 1, according to the report.

As of the end 2013, Saint Vincent had $102.3 million in pension assets and $166.6 million in pension obligations.

Highmark Health also reported $7 billion in cash and reserves, and a surplus of nearly $6 billion.

Hanlon said the Erie hospital's overall financial health is strong.

"In general we have been pleased with Saint Vincent since the affiliation," Hanlon said. "We feel the management there is doing a good job."

On the insurance side, Highmark Inc. saw a 95 percent retention rate for its customers in western Pennsylvania in 2013, and a slightly lower rate during the current renewal period.

Most UPMC hospitals, including UPMC Hamot, will be out of network for Highmark members starting Jan. 1 unless the two sides reach a provider's agreement.

UPMC officials have said such an agreement is unlikely.

"We are currently in the high 80s, 90 percent for July renewals," Hanlon said. "We still have some time to close things out. We feel good about that."

DAVID BRUCE can be reached at 870-1736 or by e-mail. Follow him on Twitter at twitter.com/ETNbruce.

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(c)2014 the Erie Times-News (Erie, Pa.)

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Distributed by MCT Information Services


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Source: Erie Times-News (PA)


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