Allegheny Health Network fared better than anticipated financially through September, although it continues to lose millions of dollars, according to documents released Monday by the Pennsylvania Insurance Department.
The third-quarter financial report indicates AHN’s operating losses were $32.5 million through Sept. 30, $5.4 million less than a projected loss of $37.9 million, the filing shows.
“These results reflect the sound strategy for growth and success being implemented by the AHN leadership team,” said Dan Laurent, spokesman for Allegheny Health Network.
Net losses, however, remain higher than projected for AHN. The hospital network reported $41.4 million in net losses through Sept. 30, compared to projected losses of $32.3 million.
The filing is a required portion of a corrective action plan requested by state insurance regulators when the hospital system sought $175 million from Highmark Health, its parent company.
Insurance Commissioner Teresa Miller requested the plan in June, when the department permitted the cash infusion to AHN. Officials said the money would be used for hospital renovations and capital projects such as prenatal units and trauma and emergency room hospital units at Allegheny General and West Penn hospitals and outpatient centers across the region.
Ali Fogarty, a state Insurance Department spokeswoman, said the entire corrective action plan remains under review. She said Highmark is required to file quarterly reports within 30 days of the quarter’s end.
Highmark invested more than $1 billion to form Allegheny Health Network, the region’s second-largest hospital network behind rival UPMC. It rescued the former West Penn Allegheny, a five-hospital network that was on the verge of bankruptcy.
Highmark has pointed to expansions of outpatient facilities in Pine, Bethel Park and Peters as key drivers behind AHN’s road to financial viability and reduction of operating losses.
“Highmark Health and AHN have made tremendous progress over the past two years in strengthening the operations of the network’s hospitals and in effecting greater systemwide efficiencies for the organization,” Laurent said. “We intend to continue that progress and will remain focused on the strategies outlined in the corrective action plan that move us closer to profitability and position us well to be a leading provider of health care services for this community over the long-term.”
Records show AHN has spent about $43 million of the $175 million it’s getting from Highmark, which includes $10.8 million in renovations to Forbes Hospital’s intensive care unit in Monroeville and $6.8 million in renovations to West Penn Hospital in Bloomfield.
Date: November 2, 2015