Pa. hospitals recovering from AHERF bankruptcy

Six-hospital West Penn Allegheny Health System, Pittsburgh, is posting its first annual profit since being cobbled together in the aftermath of the 1998 bankruptcy of Allegheny Health, Education and Research Foundation, or AHERF. In its third quarter ended March 31, West Penn Allegheny earned net income of $12.9 million on revenue of $310.9 million, a 4% profit margin. Officials project that the system will end its fiscal year with up to $20 million in net income and up to a 32% increase in revenue over the previous year. Inpatient volumes are up 5%, although they were expected to be flat for five years when the system was created in 2000, a spokesman said. Officials project more than 82,000 admissions in the system's fiscal 2004, which ends June 30. West Penn Allegheny lost $15.5 million on revenue of $1.2 billion in fiscal 2003. -- by Cinda Becker