West Penn Allegheny Health System posted a net loss of $5.6 million and an operating loss of $9.1 million in the second quarter of 2009.
Christopher Olivia, MD, West Penn Allegheny's president and CEO, said the poor economy impacted the WPAHS revenue stream. He said the health system experienced a greater than 20 percent increase in both charity care and uninsured discount charges for the first six months of fiscal 2009, as compared to the previous year.
"Clearly, we still have significant work ahead of us to return this organization to sustained profitability but we are making real progress towards that goal," said Olivia.
He said West Penn Allegheny had seen a 2 percent increase in acute inpatient admissions over the prior year, improved cash flow from operations and a solid debt service coverage ratio.
The health system has also identified more than $90 million in recurring financial improvements through cost savings and revenue enhancement initiatives, Olivia said, adding that the improvements are not reflected in the current report and would be realized in subsequent quarters.
During FY 2009, WPAHS adopted a "mark to market" accounting methodology for its investment portfolio, which values unrealized loss on investments in the profit and loss statement.
Over the past six months, according to Olivia, the health system has made substantial progress in filling its executive management ranks, including the positions of chief financial officer, chief information officer, executive vice president, chief of hospital operations and executive vice president of medical affairs.
WPAHS is initiating a number of new programs at its hospitals in the first two quarters of fiscal 2009, including a new endoscopy center, a Center for Restorative Joint Surgery, a Joint and Spine Center and the expansion of inpatient rehab services across the system.