Tag Archives: Allegheny Health Network

Advocate Aurora raising minimum wage to $15/hour

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https://www.healthcaredive.com/news/advocate-aurora-raising-minimum-wage-to-15hour/543378/

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Dive Brief:

  • Advocate Aurora Health, a 27-hospital non-profit health system covering Illinois and Wisconsin, announced it will increase its minimum wage to $15 an hour by early 2021. The system plans to make the increase in steps, reaching $13 an hour in the middle of next year and $14 in early 2020.
  • In a message to staff, Kevin Brady, chief human resources office at Advocate Aurora, said the pay raise “aligns with our longstanding commitment to be market competitive and remain a place that attracts and retains top talent.”
  • It’s the latest in a growing list of health systems that are raising minimum wages. Allegheny Health Network and UPMC also set targets of $15 an hour this year.

Dive Insight:

Health systems are making these moves as they struggle to find employees in the competitive job market. Labor costs remain a major issue for hospitals and have led to nursing strikes over the past two years.

A recent Navigant analysis predicted hospitals and health systems will continue to see higher labor costs in the coming years as administrators raise wages to tackle shortages. Total employment compensation for the industry increased 2% in 2017 and 2.3% the previous year, according to the Bureau of Labor Statistics employment cost index.

Many states are also moving forward with minimum wage increases, including some that have increased pay to $15 an hour.

Brady said the health system’s goal is to be a “destination employer where our team members feel valued, have opportunities for growth and connect with our values and purpose-driven culture.” The decision will improve the workplace and, in turn, make patients “feel this is the best place to entrust their health and wellness,” he added.

Brady said the health system is investing in higher pay while still facing shrinking reimbursements and rising pharmaceutical costs. “Continuing to ensure that our team members have access to rewarding jobs with comprehensive benefits, competitive wages and an engaging work environment will not only strengthen our workplace, it will strengthen our marketplace and most importantly, enhance the quality of life in our communities from Green Bay to Bloomington Normal and everywhere in between,” he wrote to staff.

The Downers Grove, Illinois-based health system was created earlier this year with the merger of Advocate Health Care and Aurora Health Care. The system experienced a 20% drop in operating income in the first six months. The decrease was related to added costs connected to the merger and a new EHR.

Allegheny Health Network plans four micro-hospitals

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https://www.healthcaredive.com/news/allegheny-health-network-plans-four-micro-hospitals/526218/

Dive Brief:

  • Allegheny Health Network (AHN) said it will open neighborhood hospitals near Pittsburgh in Brentwood Borough, Hempfield, Hamar and McCandless over the next year.
  • The smaller facilities will be open 24/7 and offer an emergency department, 10 inpatient beds, diagnostic care and other medical services. The neighborhood hospitals will also have onsite primary and specialty care physicians.
  • The four neighborhood hospitals are part of AHN and parent company Highmark Health’s $1 billion investment plan in western Pennsylvania.

Dive Insight:

AHN said it’s creating a for-profit joint venture with Emerus to build and manage the new facilities. The Texas-based company operates neighborhood hospitals, also known as micro-hospitals.

AHN said the four neighborhood hospitals are going into communities that have limited options for healthcare services.

Cynthia Hundorfean, AHN president and CEO, said the neighborhood hospitals will use a “patient-centered model” that will focus on emergency care, short hospital stays and outpatient services.

As hospitals move away from large, inpatient facilities, some healthcare organizations have turned to these kinds of facilities. They’re smaller, have less overhead and are not meant for long patient stays. More serious acute care cases would go to traditional local hospitals. Micro-hospitals have a small inpatient component, which makes them different from urgent care and standalone emergency departments.

Earlier this year, the Advisory Board Company released a report on micro-hospitals that predicted significant growth over the next five years. The report predicted that micro-hospital growth will depend on regulatory decisions and certificate of need approvals.

“Ultimately, the new wave of micro-hospitals will need to show they can consistently meet CMS’ minimum census requirements. However, the strategic flexibility these sites offer parent systems means their future can be bright. Expect significant growth over the next five years, with the potential for further growth contingent on positive clinical and financial results,” Advisory Board said.

AHN’s neighborhood hospital plan comes after the provider wing of Highmark Health reported its best operating performance year. Highmark announced in March that AHN enjoyed a nearly 8% increase in revenues in 2017 compared to the previous year. AHN finished 2017 with $3.1 billion in revenues.

Company officials said factors in the growth included stable hospital volumes and high patient acuity, greater operational efficiencies, better care coordination and improved business and clinical process, such as revenue cycle operations. In addition, physician office visits increased by more than 4% and ambulatory surgery center volume increased by 10%. However, AHN also laid off 75 employees in corporate jobs earlier this year, though the company said it plans to add another 1,000 jobs.

 

 

Highmark Health posts record 6-month performance with $505M operating surplus

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http://www.beckershospitalreview.com/finance/highmark-health-posts-record-6-month-performance-with-505m-operating-surplus.html

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Pittsburgh-based Highmark Health, the parent company of insurer Highmark and Allegheny Health Network, reported an operating gain of $505 million in the first six months of fiscal year 2017, compared to $35 million the same period last year.

“Highmark Health delivered its strongest financial performance for the six-month period ending June 30 since the formation of Highmark in 1996,” Karen Hanlon, executive vice president and CFO of Highmark, said.

Highmark attributed its financial turnaround to improvements in its government health plan business, as well as its commercial and senior health plan segments. The company’s nealry 5 million-member health plan achieved an operating gain of $480 million in the six months ended June 30, up $399 million compared to the same period a year prior, mostly fueled by its government business.

On the provider side, Highmark’s Allegheny Health Network in Pittsburgh saw its strongest financial performance since its establishment. AHN recorded $28 million in excess revenue over expenses in the first six months of this year, an improvement of $47 million from the same period in 2016.

While intentional enrollment reductions decreased Highmark’s operating revenues year-over year by $100 million to $9.1 billion in the six-month period, at the same time the organization’s expenses dropped $50 million. Highmark attributed the decrease to reduced costs related to its Epic EHR and other technology implementations.