Community Benefit Reaches $127 Million

Lehigh Valley Health Network (LVHN) today announced a record community benefit of just over $127 million in the fiscal year that ended June 30, 2007, an increase of $26 million or 25 percent compared to 2006.

The community benefit includes:

• $90.8 million in direct patient care, the largest portion of LVHN's community benefit
• $27.8 million in physician, nursing and patient education and research
• $4.9 million for community partnerships and support for schools and community organizations, including $1.94 million in real estate taxes paid on not-for-profit owned and leased property and payments and services to municipalities and school districts in our region.
  In addition to this amount, LVHN for-profit entities incurred federal and state income tax expenses of $1.7 million in fiscal year 2007.
• $3.5 million for community health education and prevention.

The total represents the community benefit of Lehigh Valley Hospital (LVH), Lehigh Valley Hospital – Muhlenberg (LVH – Muhlenberg), Lehigh Valley Physician Group (LVPG) and Lehigh Valley Health Services. LVHN also donates space, equipment and the time and expertise of physicians and staff.

LVHN contributes to the Lehigh Valley's economic growth by providing over 9,000 jobs, which result in income tax payments to government. In order to provide capacity for an increasing number of patients, LVHN will increase the number of jobs to serve more patients in the future.

LVHN also announced total revenues for fiscal year 2007 of $1.098 billion and total expenses of $1.0325 billion, for a patient services net margin of $65.5 million, or 6 percent of total revenue (adding investment income, interest expense and income tax expense, LVHN's total margin was $91.5 million, or 8 percent). LVHN's patient services net margin for fiscal year 2006 (year-ended June 30, 2006) was $74.6 million, or 7.4 percent of total revenues. Over the past ten years LVHN has averaged a 3.9 percent patient services net margin.

In fiscal year 2007, LVHN cared for 1,990 more patients treated in the hospital, 10,387 more patients seeking emergency care and 4,338 in the clinic practices than it did the previous year. "These results show that the health care needs in our community continue to grow," said Elliot J. Sussman, M.D., LVHN's president and CEO. "That makes LVHN's position of strength even more important because it gives us resources to address these growing needs."

Dr. Sussman said LVHN is meeting these needs by reinvesting its patient services net margin in people, technology and facilities that ensure patients are receiving the highest quality care in the safest possible environment. He said these quality and safety investments have been affirmed by national monitors of quality and safety including the Leapfrog Group, US News & World Report's list of America's Best Hospitals and Hospitals and Health Networks' most wired and wireless lists. The fiscal year 2007 margin will be reinvested in the community to pay for things such as:

• Expansion of the emergency department, currently underway at LVH-Cedar Crest to meet patient demand.
• Imaging equipment in the cardiac cath lab at LVH-Cedar Crest to further improve image quality allowing for fine detail of coronary arteries during procedures.
• Image Guided Radiation Therapy (IGRT) for state-of-the-art treatment of cancer patients.
• PYXIS medication dispensing machines throughout the LVHN hospitals to further enhance patient safety by preventing potential medication errors.
• Ultrasound equipment in the Center for Women's Medicine at LVH-17th and Chew to provide higher quality images for better diagnosis.

According to Dr. Sussman, LVHN is working with more patients and their families to help them afford care based on income guidelines. The number of people filing for reduced cost-of-care applications in fiscal year 2007 increased by 36 percent to almost 3,200 at LVH, and by 50 percent to more than 1,100 at LVH-Muhlenberg. "In health care we have an obligation to be fiscally responsible and at the same time to give everyone in our community the opportunity to receive quality care," Sussman said. "Our charity care policies offer that opportunity to those truly in need."

Dr. Sussman also stressed a growing community interest in LVH and LVH-Muhlenberg. He said the level of philanthropic support has increased considerably over the past five years measured by the number of donors, number of gifts and the amount of cash and pledge gifts. The number of donors and gifts each were more than 40 percent higher last year compared to five years ago, and the total amount of those gifts averaged $13.8 million each year during those same five years. "This kind of generosity demonstrates that our community understands the ever increasing need for donor support to invest in technology, services, programs and facilities to continue providing the highest quality care."

Based in Allentown and Bethlehem, Pa., Lehigh Valley Hospital and Health Network comprises Lehigh Valley Hospital – Cedar Crest & I-78, Lehigh Valley Hospital – 17th & Chew, Lehigh Valley Hospital--Muhlenberg and Lehigh Valley Health Services, which includes home health, hospice, pharmacy and health management. Advanced regional resources at these non-profit hospitals include a Level I Trauma Center with added pediatric qualifications, as well as burn, kidney and pancreas transplant, perinatal/neonatal, cardiac, cancer care, and neurology and complex neurosurgery.

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