West Penn Allegheny stands behind flagship hospital
West Penn Allegheny Health System will continue to reconfigure its hospital network as part of its financial turnaround, but does not intend to close flagship West Penn Hospital, the system's CEO said Monday.
Making a direct reference to the recently announced shutdown of UPMC Braddock, Dr. Christopher T. Olivia said West Penn Allegheny is committed to meeting the needs of the Bloomfield community. Earlier this year, some doctors and employees talked about the potential closure of the 500-bed West Penn.
"We're not for profit, we are a charitable organization, we're supposed to act in a charitable way," Olivia said in a meeting with reporters at the system's North Side headquarters. "The easy thing would be to say, 'Let's just close it.' But you have to ask the question, 'What's the best thing for the community?' "
Olivia's remarks followed last week's announcement that financially troubled West Penn Allegheny posted a modest $2.1 million fourth-quarter profit during the fiscal year that ended June 30. The system cut its net losses in half, to $25.2 million from $57.8 million a year before. Olivia expressed confidence that the system will post a positive operating margin this year.
Officials have identified about $110 million in cost-savings and additional revenue, and Olivia said the bulk of it -- about $70 million -- will be reflected in the current fiscal year. The cost-savings mostly were made by cutting back-office and administrative jobs and renegotiating managed-care contracts.
"We're clearly headed in the right direction," Olivia said. "We're not where we need to be, but we've made a lot of progress in the last year."
Asked about the just-dismissed federal lawsuit it filed against rival University of Pittsburgh Medical Center and health insurer Highmark Inc., Olivia said West Penn Allegheny is evaluating its options. The system's financial turnaround is not dependent on the lawsuit's outcome, he said.
Olivia criticized UPMC for its decision to shut UPMC Braddock while opting to build a hospital in Monroeville within a mile of Forbes Regional Hospital, which West Penn operates. He said West Penn Allegheny is considering how it can step in to help meet the needs of Braddock and its surrounding neighborhoods.
"I think duplicating resources in this financially difficult time, like building a hospital a mile away from another, is not the way to go," he said.
UPMC spokesman Paul Wood could not be reached for comment.
West Penn Allegheny's plans for its two largest hospitals -- West Penn, and Allegheny General in the North Side -- include moving the most complex services to AGH. Services such as obstetrics are being consolidated at West Penn, which will continue to have inpatient beds, Olivia said.
Other plans under consideration include the establishment of a four-year medical school to address what Olivia called a demand for educational venues for Western Pennsylvania students. West Penn Allegheny has partnerships with Temple University and Drexel University, but Olivia said a new four-year program could double their capacity. He expects a decision in about a year.