Excela Health's investments overcome losses for $15.7 million profit in first half of fiscal year

Excela Health posted a $1.8 million operating loss for the first six months of its fiscal year but was pulled out of the red by investments, which earned a healthy $17.5 million, the health system announced.

Excela posted a net profit of $15.7 million for the first half of the fiscal year ending June 30, which will be plowed back into serving the community, CEO Robert Rogalski said Monday at the health system's annual meeting at Saint Vincent College. Rogalski attributed the operating loss to a reduction in payments from insurers and an increase in patients it serves who are on Medicaid and Medicare.

Inpatient admissions to Excela's three hospitals — Westmoreland in Greensburg, Frick in Mt. Pleasant and Latrobe hospital — dropped to 15,920, or 1 percent lower than the previous six-mnonth period in 2016. Some of that decrease is because of competition and a trend to treat people in less expensive settings, he said.

While admissions were down slightly, Michael Busch, Excela's chief operating officer, said more patients are being seen for a 24-hour period of observation. That is not classified as an inpatient stay, Busch said.

In the past few years, Excela has bought independent physicians practices, building its spectrum of care and ensuring that admissions or testings ordered from those medical practices go to Excela facilities. But, Rogalski said, there are fewer independent physician practices, and Excela is not planning to buy any at this time.

The health system has added 41 physicians to its medical staff through its family residency program, Rogalski said.

“We continue to lean heavily on the family practice residency program,” Rogalski said.

Excela last year received the prestigious DeWitt C. Baldwin Award, one of two given out of 11,000 residency programs for fostering a supportive environment for medical education and delivery of patient care, Rogalski said.

Excela continues to accept medical insurance from the two dominant health care insurers in the Pittsburgh area — the University of Pittsburgh Medical Center and Highmark Inc. While UPMC and Highmark's Allegheny Health Network have bought hospitals and health systems in nearby counties, Excela intends to remain independent from UPMC and AHN, Rogalski said.

“That's what we are going to focus on,” Rogalski said.

AHN has set up facilities in Excela's market, opening a 23,000-square-foot multispecialty facility in Hempfield last year. It also announced plans in December to build a small hospital along Route 30, west of the intersection with Toll Route 66. Despite opposition from Excela, Hempfield supervisors in December approved the occupancy for about 79,000 square feet of the proposed 120,000-square-foot facility.

Dan Laurent, an AHN spokesman, could not be reached for comment.

UPMC said in a statement Monday that “it continues to work collaboratively with Excela Health to coordinate clinical care and community services that are needed and can be provided close to home for Westmoreland County residents.”

Joe Napsha is a Tribune-Review staff writer. Reach him at 724-836-5252 or jnapsha@tribweb.com.