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Format: 04/16/2014
Format: 04/16/2014


West Penn Allegheny Health System Announces Consolidation Plan for City-Based Hospitals

Tuesday, June 29th, 2010

Pittsburgh, PA – West Penn Allegheny Health System (WPAHS) officials today announced a major consolidation of the System’s two city-based acute-care hospitals to better meet community health needs and prepare the System for national healthcare reform changes.

Under the consolidation, Allegheny General Hospital (AGH) on the North Side will serve as West Penn Allegheny’s quaternary facility, supporting the System’s comprehensive services in oncology, the neurosciences, critical care, orthopaedics and cardiovascular care, as well as the organization’s comprehensive clinical and basic research programs.

West Penn Hospital in Bloomfield will continue to support the System’s Women’s and Infants’ Center, bariatric surgery program, the West Penn Burn Center and inpatient rehabilitation services. The hospital will maintain all of the necessary ancillary services to support these programs. Additional outpatient programs that may remain at the hospital are also under consideration.

All other medical and surgical programs of West Penn Hospital will be moved to AGH and other West Penn Allegheny facilities by the first quarter of calendar year 2011. West Penn Hospital’s emergency department will also close in January.

Christopher T. Olivia, WPAHS President and Chief Executive Officer, acknowledged the difficulty of change, particularly when it affects talented and dedicated employees. The consolidation is expected to affect the jobs of up to 1,500 WPAHS employees.

“There is no more painful decision an organization can make than one that involves a loss of valued colleagues, many of whom have worked within the organization for a long time. We will do everything we can to assist them in this transition,” Dr. Olivia said.

West Penn Allegheny will offer severance packages to eligible employees as well as comprehensive outplacement assistance. The System will have a Career Center and counselors onsite to help employees with resume preparation, interviewing skills and job searching.

Dr. Olivia said the necessary consolidation reflects a strategic transformation of West Penn Allegheny’s healthcare delivery system to better meet the needs of patients by addressing changes in the market and positioning the System for the full implementation of federal healthcare reform.

“Like the majority of healthcare providers throughout the country, West Penn Allegheny has experienced declining reimbursements for inpatient care and a significant increase in the demand for outpatient services. We must respond to these trends so that we can continue providing the people of Western Pennsylvania with an exceptional choice for advanced, comprehensive medical care,” said Dr. Olivia.

Dr. Olivia said the city and county’s population has declined and more patients are seeking care closer to home – which is increasingly outside of the city as population shifts in the region. In addition, more patients are seeking care in an outpatient setting. Both of these trends have an impact on inpatient volume in the city of Pittsburgh, and the results have been particularly acute at West Penn Hospital, which has struggled significantly from a financial perspective. The hospital’s average daily census is currently around 240 patients, or just 47 percent capacity.

West Penn Allegheny reported an $11.6 million operating loss for the nine month period ending March 31, 2010. This performance occurred despite improving its cost structure dramatically over the past two years through program integration and improved operations.

“Our goal is to establish a thriving healthcare organization that has long-term viability in the region. Although we have made significant progress, it has become clear that an even bolder strategy is necessary to move West Penn Allegheny from our current position to one of prosperity and growth,” Dr. Olivia said.

“After long and careful deliberation, we believe this consolidation, together with our suburban strategy, will help us achieve this goal and seeks to ensure that we have the necessary capital and alignment of resources to fulfill our mission and charitable purpose,” he said.

In May, West Penn Allegheny announced that the Suburban Campus of AGH, located in Bellevue, would become a comprehensive outpatient facility with all inpatient care and surgical services transferred to other facilities in the System. Two weeks ago, the System announced plans to build a 55,000 square foot ambulatory care and surgery center in Peters Township.

David McClenahan, Chair of West Penn Allegheny’s Board of Directors, said that the System’s urban hospital consolidation plan is designed to preserve jobs in the long-term by stabilizing and strengthening the healthcare system’s financial footing.

“By combining the best of AGH and West Penn Hospital into one outstanding quaternary healthcare entity and expanding the scope of our regional footprint through enhanced community
hospital programs and a network of ambulatory care centers, we are endeavoring to build the foundation of a formidable healthcare organization that will serve this region with distinction for many years to come,” Mr. McClenahan said.

Mr. McClenahan, who joined the West Penn board in 1978 and has been a board member of the System for the last 32 years, said that maintaining a presence in Bloomfield is extremely important.

“We recognize how difficult this development may be for residents of Bloomfield and its surrounding neighborhoods. It is important to stress that our support of the community will not waver. The programs remaining at West Penn Hospital will be instrumental to our success. They complement those at AGH, providing a full spectrum of tertiary services to the region,” he said.

Sanford Kurtz, MD, said patients, physicians and other healthcare professionals can expect the already impressive scope and quality of care delivered at West Penn Allegheny to be enhanced by the organization’s strategic realignment.

“West Penn Allegheny’s strength has always been the outstanding quality of its clinical programs, the unique level of personalized care it delivers to patients and its ability to attract the highest caliber of physicians, nurses and ancillary staff to practice within it walls. The consolidation and the restructuring of our delivery system will provide patients with services closer to home and further solidify those strengths,” said Dr. Kurtz, who is Executive Vice President, Chief Medical Officer and President of the WPAHS Physician Organization.

WPAHS will host a community town hall meeting to discuss the plan publicly at the Immaculate Conception School auditorium, located at 321 Edmond Street in Bloomfield, tomorrow evening from 7 to 8:30 p.m.





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