AHN sees another profitable quarter

Pittsburgh Post-Gazette

The Allegheny Health Network has marked its fifth consecutive quarter in positive operating territory, a new filing by the eight-hospital system shows.

For the three months ending June 30, AHN recorded $22.3 million in operating income, compared with $16.45 million for the same period in 2017.

Its net income of $17.1 million was down from $28.3 million a year ago when the network had a one-time financial gain from the sale of a home health joint venture.

In another key metric, the network’s operating margin of 2.7 percent for the quarter was up from 2.1 percent last year.

“We’re very pleased with how we have performed,” said Jeff Crudele, chief financial officer for AHN, in a phone interview.

Mr. Crudele cited as factors better expense management, including a slightly shortened average length of in-patient stays despite treating higher acuity patients, and efficiencies realized in contracting and supply management.

The network’s financial profile also has been boosted by a bond issuance in December to consolidate debt within the network, as well as Highmark Inc. forgiving a $524 million debt.

Last week, Standard & Poors Global Ratings also gave an A long-term rating to an upcoming $1 billion bond issuance that will be used to refinance existing debt.

The quarterly filing is required by the Pennsylvania Insurance Department as a condition for Highmark’s 2013 acquisition of the West Penn Allegheny Health System, whose hospitals now comprise the core facilities in the Allegheny Health Network.