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Unanswered questions follow dismissal of Allegheny Valley Hospital chief

| Friday, July 26, 2013, 12:03 p.m.
Eric Felack | Valley News Dispatch
Allegheny Valley Hospital, Harrison, taken on Thursday, July 25, 2013.
Ned Laubacher

Although the sudden layoff of its top administrator shook Allegheny Valley Hospital, its parent company will not say if more are coming.

The departure of Ned Laubacher, who was the chief executive officer of the Harrison hospital for four years, was announced Monday. Two administrators at Forbes Regional Hospital in Monroeville also lost their jobs and their positions were eliminated.

“This was part of an effort to streamline our leadership structure; it's nothing more than that,” said Dan Laurent, spokesman for the Allegheny Health Network, Allegheny Valley's parent group. “The future of Allegheny Valley Hospital is bright.”

But Laurent would not say if more layoffs are expected.

All of which leaves that future open to speculation by employees of the hospital and the people it serves.

Michael Harlovic , Allegheny Valley's president and chief nursing officer, has been named interim CEO.

It's a position he occupied from 2008 to 2009 when Laubacher's predecessor, Cindy Schamp, left the hospital. He will maintain the duties of his other positions as well.

A hospital spokesman said Harlovic was not available Thursday to speak to the Valley News Dispatch.

Contacted at his home, Laubacher declined to comment for this story.

About 700 Allegheny Valley employees voted in 2010 to be represented by the Service Employees International Union. They are approaching the end of their first contract next March, but an SEIU spokesman said the union would not comment on Laubacher's situation.

Laurent would not confirm if Harlovic will remain in the CEO position — or even if the position, itself, will continue to exist.

“At this point, we have no information to share along those lines,” he said. “We have no further comment beyond confirming his (Laubacher's) position has been eliminated.

“We have great confidence in Michael and his ability to assume this important role,” Laurent said. “At this time, we don't envision any change in that role.”

Laubacher last fall also was given the responsibility of overseeing strategy for Allegheny Valley and Forbes Regional.

Laurent said that was eliminated with Laubacher's job, which could raise even more speculation.

For example: Is there a strategy for Allegheny Valley and Forbes heading into the future, or is there no longer need for one?

That all of this is playing out amid the transformation of the former West Penn-Allegheny Health System into the Allegheny Health Network can heighten any uncertainty.

The transformation follows the April purchase of the system and its five hospitals, along with two others, by Highmark, the state's largest health care insurer.

A driving force in that acquisition has been the unrelenting competitive pressure applied by UPMC, both the region's dominant hospital chain and a competing health insurance company.

According to Laurent, the leadership changes are being done to streamline operations and achieve greater efficiencies in hospital operations. Actions such as that are routinely taken with takeovers in private industry when new owners look to cut costs.

“There's a lot of things going on in health care that are capturing the attention of executives,” said Deborah Bowen , president and CEO of the American College of Health Care Executives . “But we look at turnover. And when you look at turnover, for the past couple of years, 2011 and 2012, it has held pretty firm at about 16 percent.”

As for the impact of hospital purchases and consolidations, Bowen said, “I do think it is an emerging trend. We're seeing it more and more.”

But she said that it has not become a dominant factor — at least not yet.

Bowen singled out a report by the American Hospital Association which showed that between 2007 and 2012, there have been 316 such transactions involving 551 hospitals. That's out of more than 5,000 hospitals nationally.

She said what is happening with the Allegheny Health Network is not unusual.

“I think it is fair to say that health care organizations are in the process of reinventing themselves,” Bowen said. “At the center of this is, of course, serving patients in better and more inventive ways.”

“I know across the nation different (health care) organizations are trying to figure out how they should organize structurally,” she continued. “You want to make sure that your leadership team has clarity on the duties and responsibilities to get the job done. It's a complex issue, and you can't say there is just one trend impacting here.”

Bowen believes that a major factor in changes taking place within the industry is the Affordable Care Act, commonly known as “Obamacare.”

“Organizations have to prepare to see people they haven't seen before and just managing care in different ways,” she said. “Hospitals have been working on that. But, certainly, I would say that the Affordable Care Act has accelerated that process.”

With more insured people coming into the system, she said more services will be needed, and health systems must gear up for that.

“I think they are just trying to understand how to do the work that health care organizations need to do,” she said. “There is just more attention to how money is being spent across the organizations, and I just think they are looking at better ways to do that.”

“When people don't have coverage, they show up in emergency rooms, they don't get the care they need,” Bowen said. “So getting more people covered is a good thing.”

Tom Yerace and Brian Rittmeyer are staff writers for Trib Total Media. Yerace can be reached at 724-226-4675 or Rittmeyer can be reached at 724-226-4701 or

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