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6/20/2009 3:32 AM

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By Amanda Gillooly

Staff writer

agillooly@observer-reporter.com

Canonsburg General showed the biggest net income loss among local hospitals in fiscal 2007-08, but two others also lost money, a state report released Friday shows.

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The Pennsylvania Health Care Cost Containment Council reported that the Canonsburg facility had a more than 9 percent total loss in the 2007-08 fiscal year.

The hospital is not alone: The report indicates that almost a third of all acute care hospitals in the state lost money during the 2007-08 fiscal year.

And while those fiscal woes may seem natural because of last year's stock market tumble and economic downturn, the PHC4 release notes that the numbers predated those financial factors. The numbers presented run from July 1, 2007, through June 30, 2008, several months before the economy tanked.

The overall net income of hospitals across the state fell to 4.7 percent, the first decline after five years of growth in income.

Other Washington and Greene hospitals didn't fare much better, with only one ending the 2007-08 fiscal year in the black. Mon Valley Hospital ended last year with 1.5 percent net income.

The report indicated that Southwest Regional Medical Center in Waynesburg ended the fiscal year with a total margin loss of almost 1.5 percent. Washington Hospital experienced a 0.9 overall loss for the fiscal year.

"Clearly, we still have a negative margin, but it has improved over the prior several years so we're certainly headed in the right direction," said Jim Rutkowski, chief financial officer for Southwest Regional.

Essent Health Care purchased the hospital in October 2005 and operates it as a for-profit venture. Rutkowski said Essent has put a lot of money into improving facilities and services, which has helped it do better financially.

Rutkowski said proposed cuts in Medicare and Medicaid funding will be a major factor in the hospital's future financial picture.

"We are very dependent on Medicare and Medicaid, and any cut could have a negative impact," he said.

Representatives from Mon Valley, Canonsburg and Washington hospitals did not immediately return messages Friday afternoon.

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