PHILADELPHIA-Four-hospital Temple University Health System said it will expand the role of PricewaterhouseCoopers and establish a "budget achievement" committee in hopes of turning around poor operating performance. Temple lost $23 million after having budgeted for a loss of $9.3 million in the quarter ended Sept. 30, according to a performance summary filed with financial data publisher DAC. Officials cited lower-than-expected inpatient volume and outpatient revenue and losses on risk contracts. Its liquidity declined $29 million from the previous quarter as its collection cycle grew from 57 to 60 days and because of equipment purchases, a net unrealized loss on investments and its operating performance.
NEW YORK-Officials at 594-bed Lenox Hill Hospital said in October that they are considering selling real estate that is valued at $75 million and that a turnaround at the hospital would take more than one year. Up to two-thirds of non-revenue-producing real estate could be sold, Lenox officials said. Earlier in the month, Moody's Investors Service downgraded Lenox to Ba2 from Baa2--a larger-than-typical change--and placed the hospital on its watchlist for possible future downgrades. Lenox has been negatively affected by physicians leaving the hospital, low volume, lower acuity of its patients and reduction of outlier revenue. The ratings move was based on a weaker than expected balance sheet and the hospital is expected to lose $35 million in 2005 on revenue of about $587 million.
PITTSBURGH-A federal judge recently sentenced the former head of construction planning at 448-bed Mercy Hospital of Pittsburgh to 37 months in prison and ordered him to pay $4.3 million in restitution for his role in a kickback conspiracy and tax violations. David Hileman, 75, pleaded guilty to awarding construction contracts to a group of related companies in return for more than $500,000 in kickbacks from 1995 to 1998 and approving padded bills from the companies. The hospital was billed $19.2 million for the work, most of which was completed by LaMarca Corp., Monroeville, Pa. LaMarca's owners pleaded guilty to the kickback scheme in 2003. Co-owner Thomas Burtoft received 51 months in prison. At deadline, the sentence for his wife, Susan, was not available.