Butler Health System shows marked improvement in annual financial report
Butler Health System’s efforts to cut costs seem to be paying off, according to its annual report.
The financial statement, which was made public on Tuesday, Oct. 29, revealed the hospital system sustained an operating loss of $28.59 million in the 12-month period which ended June 30. That’s down from the $42.37 million loss the health system had one year earlier.
Furthermore, in the three-month period which ended June 30, Butler Health System had an operating loss of $2.45 million, compared to a $9.3 million loss in the same period 12 months earlier.
In the yearly figures, operating expenses remained mostly flat, going from $493.24 million last year to $492.41 million this year. However, operating revenues rose from $450.87 million to $463.83 million.
Butler Health System makes up half of what is now the Independence Health System, which was formed at the start of 2023 in a merger between the Butler system and Westmoreland County-based Excela Health. Tom Albanesi, the chief financial officer of Independence Health, said that the results show “significant improvement.”
“It is a reflection of our collective efforts to address and overcome the financial challenges of our industry,” Albanesi said. “While encouraged by this progress, work remains to sustain and enhance the success already achieved.”
Albanesi credited the improved financial results largely to negotiated rate increases with its insurers, as well as the health system’s efforts to reduce costs.
Although the merger was completed nearly two years ago, both parties are still making separate financial filings for logistical reasons.
“Separate financial filings are required under the terms of the existing debt agreement and will remain separate until such time as a debt refinancing is economical and executed,” Albanesi said.
Butler Health System’s report lists two sets of numbers in its quarterly financial statements, the obligated group, which is used by lenders, and the consolidated group, which is expanded to include entities such as the Butler Health System Foundation. The numbers above reflect the consolidated group.
Meanwhile, Excela Health posted a slight loss of $3.58 million for the year ending June 30, and a profit of $13.43 million for the three-month period ending June 30. By contrast, at the same point 12 months ago, Excela posted a yearly loss of $26.61 million and a quarterly loss of $4.61 million.
