News Release

UPMC NORTHWEST EARNS ANOTHER HOSPITAL AWARD
New Ranking Recognizes the Hospital's Value to the Community

July 26, 2004 — After achieving its third straight Solucient 100 Top Hospitals award this spring as one of the nation’s best hospitals, UPMC Northwest has earned a new honor that recognizes its value to the community.

Hospitals provide value to the areas they serve when they are financially viable, appropriately reinvest in their facilities, maintain a low cost structure, and have reasonable charges, according to Cleverley & Associates, an Ohio-based health care financial strategies company that included UPMC Northwest on its first Community Value Index (CVI) Top 100 list.

Cleverley & Associates’ ranking of “best value” hospitals is part of its 2004 State of the Hospital Industry report that is intended to assist hospitals in improving their financial performance.

While Solucient and other organizations rank hospitals based on clinical, operational, and financial performance, Cleverley & Associates is the first to evaluate hospitals based exclusively on their value to the communities where they provide care, the organization said in announcing its initial Top 100 honor roll.

UPMC Northwest is the only northwestern Pennsylvania hospital to make the company’s list of 100 “best value” hospitals, and one of only five statewide to achieve this distinction.

Being named a CVI Top 100 hospital “is very gratifying recognition for us,” says UPMC Northwest president Neil Todhunter. “It has been quite an honor to be chosen three times as one of the country’s best-performing hospitals, and earning recognition for our value to the community is an equally gratifying achievement.”

UPMC Northwest and other CVI Top 100 hospitals demonstrate excellence in eight different measures of value including profitability, level of reinvestment, efficiency in the use of their facilities, percentage of debt financing, inpatient and outpatient costs, and inpatient and outpatient charges, Cleverley & Associates says. “Top-tier hospitals provide community value in each core area through above-average performance in the majority of the eight measures,” the company said.

Profitability is a key indicator of value because “a hospital must be financially viable to be a valuable asset in the community,” Cleverley & Associates said. “A strong financial position must be achieved for a hospital to continue its mission of care provision while, at the same time, surviving in the turbulent health services market.”

Level of reinvestment is similarly important because a hospital has to reinvest in its facilities to meet current and emerging health care needs in the community, the financial strategies company said.

Addressing costs and their impact on value, Cleverley & Associates said “keeping costs low allows a hospital to provide efficient care that can result in lower costs for community members and third-party payers” such as Medicare and private medical insurance companies.

Finally, hospitals’ charges contribute to community value when they’re “reasonable and competitive with peer facilities,” the organization said.

Cleverley & Associates evaluated data from more than 3,500 hospitals across the country to identify UPMC Northwest and the other hospitals that provide the most value to their communities. The list includes 40 large urban hospitals (more than $100 million annual net patient revenue), 25 small urban hospitals (less than $100 million annual net patient revenue), 25 large rural hospitals (more than $28 million annual net patient revenue, the category in which UPMC Northwest earned recognition), and 10 small rural hospitals (less than $28 million annual net patient revenue).

One other UPMC hospital – UPMC Bedford Memorial – also earned CVI Top 100 recognition, along with Uniontown Hospital, Highlands Hospital in Connellsville, and Chambersburg Hospital.

In addition to its Top 100 ranking, UPMC Northwest earned mention as a Cleverley & Associates “Five-Star Hospital” for ranking in the top 20 percent of the 3,500-plus hospitals that the company assessed for value to their communities.