Hospital revenue a bright spot as Independence Health grapples with outstanding losses

Independence Health has seen some positive financial results at its five hospitals while still working to reduce overall losses in eight figures for its multi-county health care system.

According to a presentation Independence Health shared this week with TribLive, revenues exceeded expenses at each of its hospitals for the 12 months that ended on June 30.

At all but one facility, Butler Memorial Hospital, the amount of excess revenues increased from the previous year that ended on June 30, 2024.

Figures Independence Health cited this week, for the year ending in June, indicate revenues exceeded expenses by about: $36.2 million at Westmoreland Hospital in Greensburg; $41.2 million at Latrobe Hospital; $15 million at Frick Hospital in Mt. Pleasant; $26.6 million at Butler Memorial Hospital; $9.5 million at Clarion Hospital.

An earlier report listed the following respective figures for the year that ended in June 2024: $32.3 million at Westmoreland; $33.2 million at Latrobe; $11.5 million at Frick; $28.8 million at Butler; $2.6 million at Clarion.

Tom Albanesi, Independence Health’s chief financial officer, said the revenue improvement can be attributed largely to more favorable contracts with major payors, such as health insurers.

He also cited increased buying power and operational improvements since 2023, when Independence was formed through a merger between Westmoreland County-based Excela Health (with its Westmoreland, Latrobe and Frick hospitals) and Butler Health System (with Butler and Clarion hospitals).

Albanesi said a workforce reduction also played a role in improving the ratio of revenues to expenses.

In April, Independence Health reported layoffs of 151 employees. It cut 226 positions in 2023.

Currently, it lists a workforce of about 7,000 with 594 job openings to fill.

Since the merger, Independence “has worked to cut losses almost in half, from $74 million in Fiscal Year 2023 to $41 million in Fiscal Year 2024,” Albanesi said. “In Fiscal Year 2025, we expect losses to be halved yet again, with a line of sight to break even emerging.”

With still more work to do, he said, “it’s a remarkable turnaround that represents our mission to keep expert care here, in the communities we serve, while securing the long-term strength and stability of our organization.”

Albanesi said expenses actually increased by 3% in Fiscal Year 2025 compared to the previous year.

Independence made efforts to reduce expenses, he said, but added, “Offsetting some of those savings were increases in fringe benefits for our employees and their families as well as contract labor.

“We will be focused on tightening up these expenses in 2026.”

Independence Health this week also listed changes made or underway at its hospitals.

• Westmoreland Hospital — Upgrades to OB/GYN and maternity care areas, including opening of a new outpatient clinic; improved access to areas dedicated to cardiology, surgery, bariatrics and weight loss.

• Latrobe Hospital — Expansion of child and adolescent mental health services, with 14 new private inpatient rooms and upgraded nursing stations and common areas.

• Frick Hospital — Women’s Health Clinic opened in June 2024, with more than 10,000 patients seen since then.

• Butler Memorial Hospital — Enhanced security with metal detectors at visitor entrances; inaugural class of family practice residents came on board in July; renovation of drug and alcohol unit; replacement of MRI and CT scanners; construction to be completed in 2026 for PET (positron emission tomography) scanning.

• Clarion Hospital — Replacement of MRI scanner; expansion of newer services including plastic surgery and Mohs procedures, which are used to treat skin cancer.