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Job cuts at AGH part of 'strategic' process

| Monday, March 10, 2014, 11:15 p.m.

Workers are losing jobs at Allegheny General Hospital as part of a restructuring of the medical center to become more “effective, efficient and accessible,” the hospital said on Monday.

Spokesman Dan Laurent declined to provide specifics but said rumors that as many as 300 positions would be eliminated at the North Side hospital are incorrect.

“Nothing anywhere near that occurred at AGH or anywhere else in the organization,” he said.

“We are routinely assessing and adjusting our workforce structure across all of our assets to meet the evolving needs and strategic direction of the health system,” Laurent said, calling it “an ongoing process that involves eliminating positions in some areas and adding positions in other areas.”

Allegheny General is the flagship hospital of Allegheny Health Network, which health insurer Highmark Inc. established last year with its acquisitions of West Penn Allegheny Health System and two other hospitals.

West Penn Allegheny, nearly bankrupt at the time of the acquisition, has posted huge financial losses for several years. In February, the system reported an operating loss of $2.1 million for the October-December quarter, which was improved from an operating loss of $33.1 million in the quarter the year before.

Part of Allegheny Health Network's strategy to turn around its finances is to trim expenses. In July, the system announced it would lay off 262 workers and eliminate 200 open positions.

The five-hospital West Penn Allegheny system employed 10,150 people as of Dec. 31, according to a filing with the state Department of Insurance.

Officials with the SEIU Healthcare Pennsylvania union, which represents nurses at Allegheny General, did not respond to requests for comment.

Highmark has spent about $2 billion to form its network to compete with UPMC, the largest network of hospitals and doctors in Western Pennsylvania. Because of the insurer's hospital purchases, UPMC has refused to negotiate a reimbursement contract that would give Highmark members in-network access to UPMC hospitals and doctors.

Without a contract, Highmark subscribers will pay more costly rates at UPMC after Dec. 31, which could push more patients into the Allegheny Health Network.

Highmark has about 3 million members in Western Pennsylvania.

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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