Case study: West Penn Hospital begins loss-reversal plan

Apparently, it's tough being a competitor to the University of Pittsburgh Medical Center, a billion-dollar juggernaut that has generally been a strong financial performer. West Penn Allegheny Health System has lost money on operations for two years, a situation the management has decided it won't tolerate anymore. Aided by turnaround consultant Wellspring Partners, which has installed its former managing director as CEO of one of the chain's hospitals, the system is beginning a "financial improvement project" designed to cut expenses, grow revenues, better cash flow and improve management controls. As part of the project, Wellspring has already interviewed more than 250 managers within the five-hospital system.

Among the more aggressive moves the system plans to make is a detailed examination of "productivity and staffing," an analysis that will look at labor performance within each of its hospitals--and might result in some staff cuts. The chain also is looking at purchasing and collections practices. In addition, the system's CEO has put a temporary hold on capital spending and started steps to speed up long-planned (and long-delayed) consolidations of services and departments.

To learn more about West Penn's plans:
- read this Pittsburgh Post-Gazette piece

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