Newest Pittsburgh area health system halves operational losses

By Kris B. Mamula / Pittsburgh Post-Gazette

Fiscal challenges remain, but the Pittsburgh area’s newest health care system cut its losses by nearly half over the 12 months ending June 30, while operating revenue and service utilization rose, a new report indicates.

The five-hospital Independence Health System on Tuesday reported a total loss from operations of $40.1 million for the 12 months ending June 30, down from an operating loss of $78.4 million a year ago.

Losses from core operations at the former Butler Health System’s two hospitals and clinics in Butler and Clarion counties totaled $28.5 million at the end of June compared to $42.3 million a year ago, while operational losses at the former Excela Health’s three Westmoreland County hospitals and medical facilities were $11.6 million in June, down nearly two-thirds from $36.1 million a year ago.

Combined revenue from operations for the fledgling system totaled $1.16 billion for the 12 months, up 4.5% from $1.11 billion a year ago. Hospital admissions to the three former Excela hospitals of 22,189 for the year were up 8.7% from 20,412 a year ago, while admissions to the former Butler and Clarion hospitals rose 2.6% to 14,614 for the year.

Butler and Excela health systems merged in January 2023 to create Independence Health System with 925 hospital beds in three Western Pennsylvania counties, more than 1,000 doctors and 7,300 employees.

Both systems continue to separate financial reporting for bondholder disclosure requirements.