St. Clair’s financials stung by virus
Stung by the shutdown of nonemergency medical care, St. Clair Hospital in Mt. Lebanon on Thursday reported a drop of nearly 15% in operating income for the nine months ending March 31, proof that not even the most fiscally healthy medical institutions are immune to fallout from the COVID-19 pandemic.
St. Clair, which stopped doing nonemergency medical procedures in early March to comply with state health department directives, reported operating income of $22.4 million for the nine months ending March 31 — 14.7% or $3.8 million less than the same period a year ago.
The hospital’s operating margin for the period was an enviable 9.3%, but still lower than the prior year’s margin of 11.3%.
The statewide average hospital operating margin was 5.63% in 2019, according to the Pennsylvania Health Care Cost Containment Council. That compared to 4.51% for southwestern Pennsylvania institutions, with many smaller health systems operating in the red.
St. Clair has historically been among the fiscally fittest hospitals in the Pittsburgh region with regular double-digit returns from delivering core medical services.
In addition to a 329-bed hospital, St. Clair operates outpatient centers in Bethel Park and Peters. Construction is underway on a third, 280,000-square-foot comprehensive outpatient center on the hospital campus — the biggest expansion at St. Clair in four decades.
The outpatient center — which is being paid for with government grants, bond proceeds and other funds — is expected to open in 2021.
Despite the March slowdown
due to efforts to contain the highly contagious respiratory coronavirus, St. Clair reported a 4.3% gain in net patient service revenue — $234 million compared to $224.3 million the previous year — and a 3.8% increase in operating revenue — $242 million compared to $233 million a year ago.
Excess revenue over expenses fell 75.3% to $8.2 million from $25.1 million a year ago.
Investment losses, driven by sharp market declines in March, totaled $14.1 million, which compared to the prior year’s gain of $7.1 million.
St. Clair is the latest independent community hospital to report losses from preparing for the COVID-19 outbreak and the suspension of nonemergency medical care, which include high-margin procedures.
Excela Health in Westmoreland County, Heritage Valley Health System in Beaver County and Washington Health System in Washington County also reported COVID-19-related losses in recent financial results.