Allegheny Health Network made $3.3B last year, up 6.9 percent from 2017 |

Allegheny Health Network made $3.3B last year, up 6.9 percent from 2017

Natasha Lindstrom
Allegheny Health Network on Tuesday announced the opening of a comprehensive medical clinic at Highmark’s Penn Avenue Place in Downtown Pittsburgh.

Allegheny Health Network took in $3.3 billion in revenue last year, a 6.9 percent increase from 2017 as the health care provider and hospital system moves on aggressive expansion plans to reach more patients, financial statements filed Thursday show.

Total operating revenue in 2018 increased by $213 million from the previous year, marking the system’s second consecutive full year of positive earnings, according to AHN’s fourth-quarter unaudited statement of operations filed with the Pennsylvania Insurance Department.

“We really are pleased with our performance,” Chief Financial Officer Jeff Crudele said. “We’re well-positioned, and we have the capacity to continue to expand access to the system to ensure that it’s meeting the needs of the community.”

Total operating income, the amount earned after factoring in the costs of day-to-day business, totaled $39 million in 2018. Last year’s net income, the earnings after factoring in all costs including debt and taxes, totaled $2.8 million. AHN finished the year with $3.2 billion in net assets.

Surge in same-day appointments

Crudele attributed part of the system’s patient gains to the same-day appointment option that AHN rolled out in 2017.

“You wake up in the morning and you decide that you need a doctor. Instead of calling and getting an appointment 30 days out, you can go online and pick up the phone and find one on the same day,” Crudele said. “Our doctors loved and embraced the idea. It sounds fundamental, but it’s really a fundamental game-changer in the way we’re providing patients a more retail-oriented approach.”

The service can be used not only for primary care physician appointments but also for specialty care such as gastroenterology, orthopaedics, dermatology and gynecology.

The system’s number of same-day patient appointments climbed by 34 percent in 2018, from 155,000 in 2017 up to more than 207,000 last year. Over the same period, emergency room visits dropped by 2.6 percent.

Last year, AHN hospitals had a total of 277,587 emergency room visits, 1.3 million outpatient registrations and 2.98 million physician visits.

Crudele said that other efforts in line with AHN’s focus on “patient-centered care” include building more neighborhood hospitals and launching new programs at existing sites, such as an after-hours cancer care clinic and autoimmunity institute at West Penn Hospital in Pittsburgh’s Bloomfield neighborhood.

In the third quarter of 2018, AHN broke ground on a 150-bed community hospital in Pine expected to open in 2021, and a neighborhood hospital in McCandless expected to open in late 2019. It also opened an outpatient center in O’Hara and a medical center in Downtown Pittsburgh.

RELATED: Allegheny Health Network 3rd quarter financials exceed expectations

In the fourth quarter, AHN opened The Alexis Joy D’Achille Center for Perinatal Mental Health at West Penn Hospital, Saint Vincent Women’s Center and Women’s Institute at Saint Vincent Hospital. It announced plans to open a new cancer center in Hempfield Township, Westmoreland County.

A cancer center is set to open in Monroeville on Feb. 13 followed by a cancer center in Butler on March 8.

Patient gains, investment losses

During the three months that ended Dec. 31, AHN reported an operating income of $9.8 million, the system’s seventh straight quarter of positive earnings. Net patient revenue grew 7.2 percent to $795.3 million, and total operating revenue reached $831.9 million, a 7.5 percent increase from fourth quarter 2017.

However, AHN reported a fourth-quarter net loss of $15.2 million, which officials attributed to investment losses as the broader market took a dip over the past few months.

Crudele does not foresee any notable rounds of layoffs or staffing changes in the near future.

“I don’t currently anticipate any sort of significant staffing adjustments,” Crudele said. “We are committed to running the network efficiently and effectively in the environment that we’re in.”

Crudele said he is not concerned about the mid-2019 network split of Highmark and UPMC Health Plan having a negative financial impact on AHN.

“We have a proven track record of helping patients transition their business,” he said. “We just have to continue to execute on our plan and to put the patient first.”

RELATED: Fallout over UPMC-Highmark split rankles patients forced to choose sides, confront prepay rule

Natasha Lindstrom is a Tribune-Review staff writer. You can contact Natasha at 412-380-8514, [email protected] or via Twitter @NewsNatasha.