West Penn Allegheny sees patient decline amid restructuring

Pittsburgh-based West Penn Allegheny Health System reported a loss of $26.8 million at the halfway mark in its fiscal year. That's up from a loss of $8.1 million during the first six months of 2009, officials announced Friday.

The system's major restructuring project contributed $12 million to the operating loss, thanks in part to severance packages, consulting fees and physician integration costs.

WPAHS also saw weakened inpatient volume, with patient discharges falling 13.2 percent during the six-month period. That represents a $31.1 million drop in patient revenue compared with the previous year, notes the Pittsburgh Post-Gazette.

Hospital officials attributed the patient decline to the consolidation of West Penn, Allegheny General and Suburban General hospitals, in addition to a shrinking inpatient market.

"We are in a transitional period where we are seeing lower inpatient-associated revenues, yet the higher expenses of running a bricks-and-mortar-based system structured around a greater number of inpatient beds," President and CEO Christopher Olivia said in a statement. "We are continuing to execute a restructuring plan to address this. We expect our results to improve when we have fully implemented our new, more efficient model of healthcare delivery."

As a result of WPAHS's financial instability, Moody's Investors Service downgraded the system's bond ratings.

For more:
- check out WPAHS' financial results
- read the Pittsburgh Tribune-Review article
- here's the Pittsburgh Post-Gazette article