West Penn Allegheny Health System narrows losses in 2014

West Penn Allegheny Health System, a five-hospital system that is part of Highmark Health's Pittsburgh-based Allegheny Health Network, has reported its first quarterly profit since 2013, according to a Pittsburgh Post-Gazette report.

Although the system posted a $2.18 million profit for the fourth quarter of fiscal 2014, it still reported a $13.3 million loss for the 2014 calendar year. The system reported a $15.2 million loss in 2013. 

Regarding the system's fourth quarter financials, West Penn Allegheny Health System CFO Elizabeth Allen said, "We're very pleased with the results, but we're not going rest on our laurels," according to the report. Ms. Allen said the system is aiming to have a positive operating margin for the entire 2015 calendar year.

The system's occupancy rate was only 54 percent for the fourth quarter of 2014, which is raising some questions about the system's reported profit.

Stephen Foreman, PhD, an economics and health administration professor at Robert Morris University, told the Post-Gazette the low occupancy "does beg the question" of whether West Penn Allegheny Health System's profit was based on Highmark paying it more.

However, a spokesman for Highmark Health's Allegheny Health Network told the Post-Gazette, "Our improving financial performance for West Penn Allegheny can be traced to both increased overall utilization of our services and the continuing improvement in operations and efficiencies across the system."

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