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Format: 04/19/2014
Format: 04/19/2014

News

West Penn Allegheny Health System Continues Progress in Fiscal Year 2010, Announces Year-End Results

Monday, November 1st, 2010

WPAHS Builds Cash to Historically High Levels in Fiscal Year 2010 

System Moves Forward with Restructuring Plans, Incurs One-Time Non-Cash Charge

Pittsburgh, PA (November 1, 2010) – West Penn Allegheny Health System (WPAHS) today reported its financial results for the fiscal year ended June 30, 2010. WPAHS ended fiscal year 2010 with $306 million in cash, or 71 days cash on hand – the System’s best cash position since its inception. According to WPAHS President and CEO, Christopher T. Olivia, MD, the improved liquidity will enable the System to continue its restructuring plans in fiscal 2011.

The System also booked a $70.7 million one-time non-cash asset impairment charge, related to West Penn Hospital and the Suburban Campus of Allegheny General Hospital, as well as $11.8 million of other restructuring costs. The impairment charge, required under Generally Accepted Accounting Principles, reduces the carrying value of the hospitals’ buildings and equipment to estimated fair market value. Without these restructuring costs, the System’s operating loss for fiscal year 2010 would have been $7.4 million, while its net profit would have been $19.4 million.

“While we did incur some anticipated restructuring charges, it is important that we were able to move our organization forward operationally in fiscal 2010,” said Dr. Olivia. “We spent the last two years stabilizing the health system and improving our ability to generate cash flow from operations. At the same time, we developed strategic plans aimed at completely transforming our healthcare delivery model for the future. The stable cash position we developed in these past two fiscal years is enabling us to continue executing our plans in fiscal 2011.”

In June 2010, WPAHS announced plans to implement the remainder of its urban consolidation plan, which will eliminate duplicative inpatient services among its city hospitals. The System recently discontinued inpatient services at its Suburban Campus in Bellevue, and announced on Friday a focused mix of services for West Penn Hospital, which will become effective in January 2011.

“I believe we are moving forward at a remarkable pace,” said Dr. Olivia. “However, there is still much work to do and many challenges lie ahead. Though fiscal 2011 will be a difficult time of transition for us, we remain confident that we are on a course that will allow us to continue practicing medicine and improving the lives of the people of the Western Pennsylvania region.”
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