News Column

Health system expands, aims to draw more patients

June 8, 2014

By Bill Vidonic, The Pittsburgh Tribune-Review

June 08--Butler Health System is expanding its regional presence and is banking on attracting new patients by adding to the ranks of its surgeons and physicians.

In the last three years, it doubled the number of physicians it employs to more than 100, according to system officials.

Officials said those hirings helped to boost the average salary at Butler Memorial Hospital to $57,121, which is nearly $10,000 higher than the regional average for area hospitals, according to a May study from the Hospital & Health System Association of Pennsylvania.

The health system is expanding specialty areas, including open heart surgery, neurosurgery and oncology, to offer an alternative to Pittsburgh hospitals.

It is studying where area residents are going outside the system for treatment and determining how it can market itself and draw them into the fold.

"If we can bring in the experts, if we can increase the number of surgeons, then people will come to us," Chief Financial Officer Anne Krebs said.

The hospital's marketing strategy comes at a time when Pittsburgh's two largest health systems -- UPMC and the Allegheny Health Network -- are locked in a struggle, with UPMC refusing to accept the health insurance of Allegheny's owner, Highmark Health, the parent firm of the region's largest insurer.

"Our goal is to be the provider of choice for our region," Krebs said.

The Butler Health System is the third-largest employer in Butler County behind Westinghouse Electric Corp. and the federal government, according to state records.

The hospital system has satellite facilities in Armstrong, Clarion, Lawrence, Mercer and Venango counties, but the association study found that Butler Memorial alone generated $212 million in direct spending on staffing, goods and services in fiscal year 2013, which runs from July 2012 through June 2013.

The 296-bed hospital generated another nearly $235 million in "ripple effect" spending, including employees spending their paychecks, for a total economic impact of nearly $450 million.

The system has 1,973 employees at Butler Memorial, four urgent care facilities and 30 outpatient facilities.

The impact of the hospital goes far beyond the economic factors, said Stan M. Kosciuszko, president of the Butler County Chamber of Commerce.

Many employees serve on boards of local charitable organizations, including the American Red Cross and the United Way, and participate in church groups, Little League teams and other organizations.

"Their moral and volunteer contributions to Butler County are incalculable," Kosciuszko said.

The hospital has the full-time equivalent of 1,358 employees, with a payroll of $77.6 million and nearly $60 million in payroll generated by the ripple effect, the study said.

Net patient revenue, or what the hospital receives from patient care, rose just under 1 percent from 2010 to 2013, according to the study, from $197 million to $202 million.

Operating expenses rose nearly 3 percent in the same time frame, from $187 million to $203 million.

"We've taken a look at how to contain costs," said Stephanie Roskovski, chief operations officer for Butler Health System, which includes the hospital.

"Whatever we do, we have to have exceptional quality. We don't want to minimize the quality of customer service."

The hospital had a shortfall of $4.4 million in Medicare reimbursements in 2012, according to the study.

Another $8.6 million is classified as "bad debt expense," which includes unrecoverable debt, uninsured care and charity care.

Bill Vidonic is a staff writer for Trib Total Media. He can be reached at 412-380-5621 or


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Source: Pittsburgh Tribune-Review (PA)