West Penn Allegheny Health System (WPAHS) today released its second quarter earnings for fiscal year 2009. The System posted a net loss of $5.6 million dollars for the period and an operating loss of $9.1 million.

West Penn Allegheny’s Management Discussion and Analysis for the six months ended December 31, 2008 presents a number of positive performance indicators for the System as well, including a 2 percent increase in acute inpatient admissions over the prior year, improved cash flow from operations and a solid debt service coverage ratio.

Additionally, the System has identified more than $90 million in recurring financial improvements through cost savings and revenue enhancement initiatives, the majority of which are not reflected in the current report and will be realized in subsequent quarters.

The nation’s poor economy also impacted West Penn Allegheny’s revenue stream. The System experienced a greater than 20% increase in both charity care and uninsured discount charges for the first six months of fiscal 09 compared to the previous year.

“Clearly, we still have significant work ahead of us to return this organization to sustained profitability but we are making real progress towards that goal. West Penn Allegheny’s strength is the talent and dedication of its nurses, physicians and allied health professionals. That essential foundation, together with our singular mission and purpose of providing exceptional medical care to the people of this community, is what distinguishes us and what will ultimately ensure our success,” said Christopher T. Olivia, M.D., WPAHS President and Chief Executive Officer.

Dr. Olivia said the organization’s commitment to the best business and financial practices and the highest standards of transparency will also play a critical role in the System’s long-term viability. During FY 2009, West Penn Allegheny Health System has adopted a mark to market accounting methodology for its investment portfolio which values unrealized loss on investments in the profit and loss statement.

Over the past six months, West Penn Allegheny has made substantial progress in filling out its executive management ranks with experienced healthcare professionals, including the positions of chief financial officer, chief information officer, executive vice president, chief of hospital operations and executive vice president of medical affairs.

The System also continues to add new physicians to its medical staff, including a number of nationally recognized specialists over the past three months. Among those recently recruited include:

· Michael DeVita, M.D., UPMC, quality and critical care
· Peter Linden, M.D., UPMC, critical care/transplantation
· Larry Jones, M.D., UPMC burn trauma/surgery
· Roger Barrette, M.D., UPMC, burn trauma/surgery
· Kasum Tom, M.D., UPMC, transplantation surgery
· Walter McGregor, M.D., Riverside Methodist Hospital cardiothoracic surgery
· J. William Costerton, Ph.D., USC, microbiologist/infectious disease

West Penn Allegheny’s aggressive business development strategy is reflected in a number of programs initiated in the first two quarters of fiscal 2009, including its new endoscopy center at AKMC, the Center for Restorative Joint Surgery at AGH, the Joint and Spine Center at WPH Forbes Regional and the expansion of inpatient rehab services across the System.