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The following report was obtained by Labor Research Associates, an independant research firm out of New York, New York. They were hired by the PSEA. This is your union dues at work.

  

Financial Update

 

As you know, South Hills is a health system with several members. The largest member, by far, is Jefferson Hospital. 1998 was not a good year financially for Jefferson. In 1997, it barely managed to stay profitable. In 1998, however, it lost money. Although Operating revenue increased 4.37% between 1997 and 1998, operating expenses increased even faster by 5.8%. This resulted in a loss of $1.09 for the year – a profit margin of –0.803%. Additionally, their net worth decreased by almost $604,000. This came after several years of profitability.

 

Jefferson’s losses, however, need to be kept in perspective. Although the facility lost money, South Hills Health System, the parent organization, was very profitable. They earn money from two sources. The first is the sale of assets and investment income – primarily publicly traded securities. In 1998, it earned $13,422,160 through this method. Its other large source of income is by charging its affiliated organizations fees for corporate support services. This includes administrative, financial, and marketing services. In 1998, it earned $16,542,037 through this method. Jefferson Hospital contributed 96.9% of this.

 

Overall, South Hills is in excellent financial condition. They have total assets of $216.6 million – 22.6% more than in 1997 when they held $176.7 million. Liabilities have grown 40.6%, from $61.4 million to $86.3 million. Net worth increased from $115 million in 1997 to $130 million in 1998.

 

In 1998, they earned $36.7 from asset sales and corporate fees, however, expenses were only $23.1 million. This gave the company a total profit of $13.6 million in 1998 – an enormous 37% profit margin. Although Jefferson may have lost money, South Hills earnings were almost 13 times as large.

Additional Information

 

Highest Paid Independent Contractors – South Hills – 1998

Name

Type of Service

Compensation

Kirkpatrick and Lockhart

1500 Oliver Building

Pittsburgh, PA 15222-2312

Legal

$125,547

Jeffrey G. Roth, dba Marketing Information Service

228 S. Cliff Street

Butler, PA 16001

Marketing

$59,569

Gates McDonald

P.O. Box L 1929

Columbus, Ohio 43260

Consulting

$52,233

 

 

Five Highest Paid Independent Contractors – Jefferson Hospital - 1998

Name

Type of Service

Compensation

Central Blood Bank

P.O. Box 360549

Pittsburgh, PA 15251-6549

Lab

$377,707

Service Master

One Service Master Way

Downers Gr., Il 60515

Management

$293,885

Dr. Mahpareh Mostoufi

105 Quail Lane

Pittsburgh, PA 15238

Physician

$200,165

Robert Derrickson

R.D. #3, Box 231

Belle Vernon, PA 15012

Physical Therapist

$169,500

Penncraft Cabinets

151 Donora Rd.

Monongahela, PA 15063-9801

Carpenters

$117,133

 

 

Board s of Directors – Jefferson & South Hills - 1998

Name

Title - Jefferson

Title – South Hills

Harry J. Sichi

Chairman

Secretary

Laura M. Horton

Vice Chairman

Director

William R. Jennings

President

President

Gary L. Perecko

NA

Vice President

William E. Stewart

NA

Vice Chairman

Joseph T. Senko

Secretary

NA

Michael Solomon

Treasurer

Director

Richard F. Collins, Jr

Director

Director

Rev. Richard Davies

Director

NA

Martin W. Dowling

Director

NA

John R. Echement

Director

Chairman

Sr. Anna Marie Gaglia

Director

Director

Howard N. Lang

Director

Director

Kevin D. Langholz

Director

NA

William J. Magnotti

Director

Director

Michael P. McGonigal

Director

Director

Charles R. Modispacher

Director

NA

Philip F. Much

Director

NA

James L. Stewart

Director

Director

Charles E. Bunch

NA

Director

James S. Harpter

NA

Treasurer

John W. Paul

NA

Director

Rev. George L.W. Werner

NA

Director

John C. Williams

NA

Director

Evelyn E. Tunie

Director

NA

 

We hope this information was helpful. If you need a more detailed update or any other information, we would be glad to help.