Photo by Jacob Perryman Warren General Hospital CEO Rick Allen presents the annual fiscal year operating results to the hospital board Thursday.

Warren General Hospital suffered a nearly $1.5 million net loss over the last fiscal year.

It is the first time the hospital has run in the red in five years.

The news was reported by hospital CEO Rick Allen during the hospital’s annual board meeting Thursday.

He described it as “a very, very tough year for us economically.”

During his fiscal year 2023 operating results presentation, Allen noted service volumes and gross revenue actually increased, yielding a net revenue increase of one-half of a half percent. However, expenses during the same period increased approximately two percent yielding an overall 1.5% net loss.

Allen cited increased use of agency employed and travel nurses, salary increases, drug manufacturers circumventing government-required discount programs and overall inflation as the major drivers behind the expense increases.

Prior to reorganizing in 2018, the hospital had operated at a loss for years. Since that time the hospital has largely run in the black with steadily increasing gross revenues. However, since the COVID-19 pandemic, expenses have increased by $24 million, finally overtaking revenue increases this year. In the previous five years, expenses had remained largely static, actually decreasing slightly.

During the same year, patient volume increased.

Allen presented charts showing both inpatient and outpatient service days were up. He noted the increase was due to an increase in patients rather than longer patient stays.

“More people are seeking care at Warren General,” he said. “We’re seeing our reach extend.”

Overall, the hospital is performing better than other small hospitals in western Pennsylvania according to information presented during the report. While the hospital operated at a net 1.5% loss, other hospitals with less than 100 beds averaged a 3.7% loss.

Meanwhile, Allen highlighted a lot of positive moves the hospital made in the past year.

“(It was a) strong year in terms of strategy,” he said. “Not so much financially.”

Allen noted the hospital system acquired Warren Medical Group pediatrics services.

“That was a service we felt we needed to acquire and keep in the area,” he said.

The system also acquired Warren Medical Group OB-GYN services and opened new office space for it and urology services.

He also highlighted acquisition of the DaVinci Surgical Robot platform through $1.2 million in grants and donations.

The system was also granted a five-year extension of the Highmark Community Reinvestment grant.

He cited infrastructure improvements including a $1 million renovation to the maternity unit that is nearly complete and office renovations needed to meet Pennsylvania Department of Health standards. The hospital has also completed a housing unit for an incoming generator.

On the technology side, the hospital is set to go live in December with a MediTech Expanse electronic health record software.

Additionally, Allen said Warren General is taking steps behind the scenes to retain existing staff and recruit new employees.

“We’re working to continue to provide good care for the community moving into the future,” he said.