WHS acquisition among topics of annual state of economy event
Trista Thurston/Observer-Reporter
The health of health care kicked off the 12th annual Washington County: State of the Economy event on Thursday morning. And the man approaching the tee – appropriately and not surprisingly – was Brook Ward, president and CEO of Washington Health System.
Ward opened the program by explaining and supporting the pending merger of WHS, an independently run system, and UPMC. An acquisition by the Pittsburgh-based organization has some WHS employees concerned about their futures and local residents wary about potential cuts in health-care offerings.
“For two decades we competed and it was determined that we had to merge to survive,” Ward said before an audience of 320 at the Hilton Garden Inn Southpointe.
“Health-care economics are affecting most health systems. Most people would not start a business with a 2 to 4% operating margin.
Numerous factors over the past five years have conspired against the industry: declining financials, the pandemic, inflation and workforce shortages.
“We have money for a rainy day, but this is monsoon season and it’s raining really hard.”
Ward said his health system lost $22.5 million in the last fiscal year “and we’re now on track for a $32.5 million loss in the next one.”
He pointed out that UPMC has made a 10-year commitment to WHS to maintain Washington Hospital and core services in Washington and Greene counties, with Washington Hospital being UPMC’s fifth hub hospital; the School of Nursing and FM residency program; and preserving jobs, pay and benefits.
UPMC also has made financial commitments of $300 million to WHS and the community over a decade, and to transform the WHS Foundation into a community foundation with assets boosted to $40 million.
“One goal is to keep as many jobs as possible,” Ward said. “We have to get this done.”
Two economics instructors from Washington & Jefferson College – professor Robert Dunn and assistant professor Zachary Klingensmith – followed with presentations that included population changes and migration patterns throughout the region. Some figures did not reflect well on the region.
Dunn said the Pittsburgh Metropolitan Statistical Area – Allegheny and surrounding counties – had 2.79 million people in 1969. There have been declines in five straight decades since.
He added that Washington County hit a population peak in the mid- to late 1970s, at 220,000, then tailed off in the 1980s. The county, he added, has 10,000 fewer residents than it had in 1975.
He said “there’s more of a challenge finding workers,” but pointed out a positive sign “that we’re seeing people starting small businesses.
Dunn also said that two municipalities in the north-central region in the county – Peters and North Strabane townships – now have higher housing values and gained population.
Klingensmith said “we’re seeing semi-local migration,” where some Washington County residents are moving to neighboring Allegheny. But he added that a number of people have relocated from Allegheny to Washington County.
“It comes down to one word – taxes,” Klingensmith said. “Washington County has a more favorable tax rate. People often weigh amenities against taxes.”
He lamented the spending tendencies of many people. “We buy so much with debt. We’re seeing credit card balances going up and more people paying minimum amounts on balances.”
And in the heart of the Marcellus Shale, talk inevitably shifted to energy. The region comprising Pennsylvania, West Virginia and Ohio is in line to get one of seven hydrogen hubs – the Appalachian Regional Clean Hydrogen Hub. A group of five closed the program by discussing clean energy objectives, including converting natural gas to produce hydrogen.