Allegheny Health Network is on track to achieve its third consecutive year of positive earnings as the burgeoning nonprofit health system continues to expand across and beyond Western Pennsylvania, newly filed financial records show.
“Our balance sheet is in the best financial position historically than it’s ever been,” Chief Financial Officer Jeff Crudele said by phone Monday night.
AHN, based in Downtown Pittsburgh, is the health-care provider network of parent company Highmark Health. Its report last week marks the 10th consecutive quarter operating in the black, according to unaudited statements.
From Jan. 1 through Sept. 30, the network’s operating income totaled $28.9 million, down slightly from $29.2 million at the same time last year. Excess revenue over expenses totaled $55.5 million — an increase of more than 200%, or $37.5 million, from the same period in 2018.
A hefty boost in 2019 investment earnings helped to pad the network’s bottom line. Total investment earnings amounted to $50.4 million through the end of September, up from just $21.7 million over the first nine months of 2018.
Crudele said the network also benefited from increased clinical volume.
Among upticks cited by AHN in the first three quarters of 2019:
• Physician visits climbed to 2.45 million, a 10.9% increase from the same time last year.
• Surgical cases are up slightly, from 79,610 in 2018 to 82,200 so far this year.
• Births at AHN hospitals increased by 4.2%.
“We see that as continued validation of our strategy is working,” Crudele said. “The increase in physician visits has been a focus of ours for some time. … It’s a major element to our value-based strategy.”
Crudele cited AHN’s same-day appointments as an example of a service helping to drive patient growth. More than 500,000 same-day visits have been scheduled since the network began offering day-of scheduling in 2017.
“We’re making care affordable and accessible to everyone in the community all the time,” Crudele said.
AHN has more than 200 construction projects underway, including neighborhood hospitals and renovations and upgrades to existing facilities, and a roughly $300 million commitment to expanding cancer care.
A freshly inked agreement with Grove City Medical Center makes the facility the ninth hospital owned by AHN.
In 2019, AHN opened a new nursing school near Allegheny Valley Hospital in Harrison, expanded a neonatal intensive care unit at West Penn Hospital and opened a new cancer center at Forbes Hospital and an oncology clinic in Robinson, in addition to expansions in Butler and Beaver counties and New York.
Its new academic campus for research and clinical trials is scheduled for completion at AHN’s flagship Allegheny General Hospital in Pittsburgh’s North Side in early 2020.
AHN now employs more than 20,000 people, including more than 1,400 physicians, and serves patients via hospitals, outpatient offices, urgent care centers, a research institute and various joint ventures in Pennsylvania, Ohio, West Virginia, New York and Maryland.
“It’s a highly competitive market,” Crudele said. “We have to continue to execute daily on our strategy and we have to continue to be focused on the customer and deliver a superior patient experience.”
Last year marked the system’s second consecutive year of positive earnings. AHN finished 2018 with $3.2 billion in net assets.
Its parent company, Highmark Health, has net assets topping $7.4 billion.