West Penn Allegheny Health System—the distressed partner in a contentious and closely watched healthcare acquisition deal—posted another operating loss for the first three months of its fiscal year.
West Penn Allegheny, a Pittsburgh hospital operator with deteriorating finances, reported an operating loss of $28.3 million on revenue of $378.2 million for the three months that ended in September. That's more than the system lost during the same period the prior year ($27.1 million on revenue of $370.5 million).
The health system's poor financial health has strained talks (nearly to the breaking point) between West Penn Allegheny and Highmark, the Pittsburgh insurer that agreed more than a year ago to acquire the system. A dispute over how to address West Penn Allegheny's finances landed in court in September. A judge sided with Highmark after West Penn Allegheny balked at a proposed debt restructuring by trying to break off the deal.
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Lost revenue, not the extraordinary cost to repair damage from superstorm Sandy, could erode the A3 credit rating of NYU Langone Medical Center's hospitals, says an analyst with Moody's Investors Service.
As we reported, Moody's said it will review and may downgrade NYU hospitals' rating as a result of storm damage and disrupted operations.
Beth Wexler, a Moody's senior credit officer, said the biggest problem for the hospitals is that NYU Langone Medical Center's Tisch Hospital remains closed and without power weeks after the storm forced its emergency evacuation. She said that NYU hospitals have plenty of cash, however “it's more the revenue that is literally not coming in the door for extended periods of time.” And the longer the closure, the more opportunity for patients or referring physicians to turn elsewhere, she said.
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As my colleagues and I reported this week, the re-election of President Barack Obama eased some of the uncertainty over the future of the Patient Protection and Affordable Care Act.
Hospitals and doctors, state policy makers and federal regulators must now grapple with fast-approaching deadlines, the flood of new rules needed to put the law in action and the immediate threat of the fiscal cliff, as Jessica Zigmond and Rich Daly wrote in this week's magazine. But the election secured a champion of the law in the White House for four more years.
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Critical infrastructure vulnerable to flooding—including electrical switches and fuel pumps—will be moved to higher ground at New York City-owned hospitals that remain closed by damage from superstorm Sandy, said the president of the city's health system.
But first, the hospitals must open, Alan Aviles, president and CEO of the New York City Health and Hospitals Corp., told an audience in Manhattan for the Crain's New York Business Health Tech Summit.
That will not happen until January for Coney Island Hospital and February for Bellevue, though limited emergency room and outpatient services will resume sooner.
Coney Island Hospital, which lost all power for four hours during the lethal storm, has already resumed its outpatient services. Bellevue will do so next week, Aviles said on Monday when New York City Mayor Michael Bloomberg announced plans to increase the city's capital budget by $500 million, including $300 million for the health system's Sandy repairs. The City Council approved the spending on Tuesday afternoon.
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