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Allegheny Health Network reports strong quarterly operating profit | TribLIVE.com
Allegheny

Allegheny Health Network reports strong quarterly operating profit

Tribune-Review
| Tuesday, October 31, 2017 3:39 p.m
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Andrew Russell | Tribune-Review
Allegheny General Hospital is part of the Allegheny Health Network.
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Allegheny Health Network continues to show more signs of resurgence.

The seven-hospital system reported an operating income of $10.6 million for its third quarter, according to financial documents filed Tuesday.

AHN had anticipated a $7 million loss for the period, which ended Sept. 30, according to a quarterly financial statement filed with the state Insurance Department.

The network, formed in 2013 from the former West Penn Allegheny Health System, beat expectations for the fourth quarter in a row after years of losing money, according to the filing.

Chief Financial Officer Jeff Crudele said increased doctor’s office visits, better expense management and stable hospital volumes contributed to the continued uptick in finances.

“As the health care market continues to evolve, the tremendous strides we have taken this year, and over the past four years, should be reassuring to everyone who has a stake in the availability of high-quality, patient-centric and affordable health care choices in our community,” he said in a statement.

Last month, AHN and parent company Highmark Health announced a $700 million regional expansion plan that includes construction of four neighborhood hospitals, a 160-bed hospital in Pine and renovation of its existing facilities throughout Western Pennsylvania.

The expansion is expected to create 800 health care jobs. AHN employs about 17,000, while rival UPMC employs nearly 80,000.

So far through the year, AHN’s operating income is $23.2 million, while the system had anticipated about $30 million in losses for the period.

Compared to the same time period last year, inpatient discharges were up 0.7 percent and physician office visits were up 2.7 percent, Crudele said.

AHN started offering same-day doctor visits in January. Since then it has scheduled 115,422 same-day appointments and more than 25,000 were new patients, according to a news release.

“AHN’s inpatient volume continues to grow year-over-year, even as the health network aggressively seeks to limit hospital admissions and total impatient days by better managing chronic conditions, reducing hospital readmissions, and steering patients away from the hospital and the emergency room and into outpatient clinical settings,” Crudele said. “A factor in this positive volume trend is the expanding accessibility of AHN’s services in the region through new facilities, program expansion, enhanced customer services and growing numbers of aligned employed and independent referring physicians in the market.”

AHN said its outpatient surgeries at centers in Monroeville, Wexford, Peters and Bethel Park are up nearly 13 percent from 13,384 last year at this time to 15,087 as of Sept. 30.

AHN and Highmark Health compete with UPMC and UPMC Health Plan for customers.

A state-brokered consent decree that has preserved access for some Highmark members to UPMC hospitals is expiring in 2019. A three-year plan AHN filed with the state calls for continued patient growth to stabilize the hospital system.

Over the summer, Highmark Health sought and obtained greater flexibility to invest in AHN.

The Pennsylvania Insurance Department loosened requirements it imposed when Highmark formed the hospital system in 2013. Highmark Health no longer has to notify the department of any transfers to AHN over $100 million.

Ben Schmitt is a Tribune-Review staff writer. Reach him at 412-320-7991, bschmitt@tribweb.com or via Twitter at @Bencschmitt. Staff writer Wes Venteicher contributed to this report.

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