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Allegheny Health Network execs shown the door as Highmark 'streamlines'

| Wednesday, July 24, 2013, 12:01 a.m.

Some Allegheny Health Network executives are losing their jobs as Highmark takes steps to improve operations of the hospital system it began just three months ago to compete with UPMC.

The CEO of Allegheny Valley Hospital in Natrona Heights, Ned Laubacher, was laid off on Monday after four years at the hospital's helm, spokesman Dan Laurent said.

Additionally, two executives from Forbes Regional Hospital in Monroeville were let go, Laurent said. Tom Moser, chief operating officer, and Rosemary Gaglia, chief nursing officer, were laid off on Monday, and their positions were eliminated.

“These leadership changes reflect our attempts to streamline operations and achieve greater efficiencies across all elements of the organization,” Laurent said.

Laurent declined to comment on whether more layoffs were coming.

Highmark, the state's largest health insurer, purchased Allegheny Valley, Forbes and three other West Penn Allegheny Health System hospitals in April. It is reorganizing the hospitals, along with Jefferson Regional Medical Center in Jefferson Hills and St. Vincent Hospital in Erie, as Allegheny Health Network, which is competing against UPMC, Western Pennsylvania's largest hospital network.

As part of the acquisition, Highmark is boosting the former West Penn Allegheny system's finances with $475 million in grants and loans. It paid about $600 million for the system's bond debt.

Prior to the deal, West Penn Allegheny's financial losses were growing, as patient volume declined and expenses increased. In the January-March quarter, the system's operating loss grew to $37.7 million, up from $23.9 million the year before. During the quarter, revenue dropped by $10 million, and expenses jumped by $2.4 million.

Laubacher in October had been given the additional responsibility of overseeing strategy for both Allegheny Valley and Forbes. That position was eliminated with Laubacher's departure, Laurent said.

Reese Jackson remains as CEO of Forbes.

Michael Harlovic, chief nursing officer at Allegheny Valley, was named interim CEO. Allegheny Health Network hasn't decided whether to make the CEO position permanent, Laurent said.

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

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