Pittsburgh-based Allegheny Health Network recorded operating income of $16.45 million in the second quarter of 2017, an improvement of $22.45 million over what the seven-hospital nonprofit system anticipated, according to recently released unaudited financial statements.
AHN also posted higher revenues and net income than anticipated in the second quarter. The system recorded revenues of about $771 million, up from the more than the $757 million the system planned. AHN ended the second quarter with net income of $28.33 million, an improvement of $35.3 million over what the system planned.
The system attributed its strong second-quarter financial performance to various factors, such as "stable patient volumes; greater operational efficiencies and more effective business and clinical processes, such as our revenue cycle operations and care coordination through our integrated electronic health record (EPIC); improvement in the quality of our clinical programs, which has allowed us to reduce costly readmissions and hospital LOS [length of stay] and benefit from quality-related payer incentives; and more favorable contracting with payers overall."
Year-to-date, the system expected an operating loss of $20 million. However, AHN ultimately posted an operating gain of $12.61 million for the six months that ended June 30.
Additionally, AHN said ambulatory surgery center volume grew more than 18 percent year-to-date.
"Following a first quarter performance that exceeded projections and previous year financial results by substantial margins, Allegheny Health Network's success in transforming its operations and strengthening its fiscal health continued at an even more accelerated and pronounced pace in the second quarter," Dan Laurent, AHN spokesperson, said in a prepared statement. "Our results for the quarter as well as year to date through June 30 represent the organization's best performance since its inception and place the Network well ahead of its projections for the year. AHN has now beat expectations and previous year results for three consecutive quarters, and has posted a mid-year operating income for the first time in more than a decade."