Excela sees financial progress, but faces competition for patient dollars

Greensburg, Pa.-based Excela Health is seeing signs of a financial turnaround, but will face new competition for patients from Pittsburgh-based Allegheny Health Network, according to the Pittsburgh Post-Gazette.

Allegheny Health, a subsidiary of Pittsburgh-based Highmark Health, will open the health system's first mini hospital, AHN Hempfield Neighborhood Hospital in Hempfied Township, Pa., this year. The 10-bed, 79,000-square-foot facility is less than 5 miles away from Excela's Westmoreland Hospital.

But Excela Health acting CEO John Sphon told the Post-Gazette the new competition is not his organization's primary focus.

"We can’t control what they do," he told the newspaper. "We don't want to get distracted. The important thing is for our community to know the difference" between the capabilities of Excela and Allegheny Health's new facilities.

Excela has faced financial and other challenges this year.

The health system's CEO and COO unexpectedly departed in April after Excela ended the second half of 2018 with a net loss of $24.6 million, compared to net income of $15.7 million in the second half of 2017. And Moody's Investors Service downgraded the outlook on Excela's bonds from stable to negative in January.

The health system has taken various steps to improve financially, including outsourcing its accounting and billing operations to Optum 360 in March.

The health system now is seeing signs of a financial turnaround, such as physician hires in cardiovascular surgery that should reduce expenses, according to the Post-Gazette. Excela also saw its losses shrink to $1.2 million in the first three months of fiscal 2020, compared to a loss of $4.1 million for the same period a year prior.

Mr. Sphon told the newspaper fewer patient admissions is still an issue at Excela Health, but he is hopeful patients will come to Excela for healthcare, particularly since Excela Health and Allegheny have recently finalized a patient transfer agreement allowing patients who can't be treated at Allegheny Hempfield Neighborhood Hospital to be taken to Westmoreland Hospital.

Read the full Post-Gazette report here


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