TribLIVE

| Business

 
Larger text Larger text Smaller text Smaller text | Order Photo Reprints

Hospital profit margins decline in Pittsburgh area

Email Newsletters

Click here to sign up for one of our email newsletters.

On the Grid

From the shale fields to the cooling towers, Trib Total Media covers the energy industry in Western Pennsylvania and beyond. For the latest news and views on gas, coal, electricity and more, check out On the Grid today.

'American Coyotes' Series

Traveling by Jeep, boat and foot, Tribune-Review investigative reporter Carl Prine and photojournalist Justin Merriman covered nearly 2,000 miles over two months along the border with Mexico to report on coyotes — the human traffickers who bring illegal immigrants into the United States. Most are Americans working for money and/or drugs. This series reports how their operations have a major impact on life for residents and the environment along the border — and beyond.

Wednesday, May 15, 2013, 12:06 a.m.
 

Profit margins at hospitals across the Pittsburgh region are falling as they face cuts in government reimbursements and declining patient volume.

The average margin on hospital operations last year was 5 percent, down from 6.1 percent the year before, according to a report released on Wed­nesday by the Pennsylvania Health Care Cost Containment Council.

The council, an independent state agency in Harrisburg, collects annual financial data on the state's hospitals, including the 27 not-for-profit medical centers in the Pittsburgh area.

“While a number of hospitals, particularly larger facilities, experienced relatively healthy margins in fiscal year 2012, there are trouble spots among many of the small to mid-size hospitals in PA,” Joe Martin, the council's executive director, said in a written statement.

Four hospitals in the region posted negative operating margins for the fiscal year that ended June 30, 2012, the council report shows. That's improved from the previous year, when six area hospitals had negative margins.

Ohio Valley General, a 138-bed hospital in McKees Rocks, posted a negative margin of 5.8 percent. Officials could not be reached for comment.

Heritage Valley Health System's Beaver hospital had a negative margin of 1.8 percent. Heritage Valley spokesman Dan Murphy said the system as a whole, which includes a hospital in Sewickley and other operations, recorded a 0.6 percent operating margin last year.

The Sewickley hospital had a profit margin of 4.3 percent, according to the council's report.

Two of West Penn Allegheny Health System's five hospitals — Canonsburg General and West Penn in Bloomfield — showed the two worst negative margins last year, 7.9 percent and 17.6 percent, respectively.

West Penn Allegheny spokesman Dan Laurent said the large loss at West Penn, a shortfall of $40 million between revenue and expenses, was caused by a shuttering of most of the hospital in the previous year. It was reopened in early 2012 and has been adding services, Laurent said.

“We experienced some expected operational losses during the initial start-up period as the community, EMS (emergency medical services) and referring doctors became reacquainted with the hospital,” he said.

Since then, West Penn has added specialists and opened a cardiovascular surgery area, which are bringing in more patients.

“At Canonsburg, we are also exploring opportunities to enhance and grow the services we offer at the hospital,” he said.

Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or anixon@tribweb.com.

Add Alex Nixon to your Google+ circles.

Subscribe today! Click here for our subscription offers.

 

 

 


Show commenting policy

Most-Read Business Headlines

  1. Ambridge’s PittMoss takes off with help from TV show, Mt. Lebanon native Cuban
  2. U.S. Steel to debut oil, gas pipeline connector
  3. Alcoa among 13 firms in $140B carbon-footprint pledge
  4. Israel’s Teva drops bid for Mylan, buys Allergan for $40.5B
  5. Muni bond funds stressed
  6. Pitt to start Energy Law and Policy Institute
  7. Plummeting natural gas prices slash revenue of Marcellus shale producers
  8. Federal safety regulators go into bulldog mode on how automakers handle recalls
  9. Wabtec moves to buy France-based transport company
  10. Stocks in slump as Chinese shares plunge
  11. Invasive beetle costs Pittsburgh-area power companies plenty