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U Pittsburgh Med Center operating revenue up to $11B

May 6, 2017
  • UPMC announced Thursday that its operating revenues grew to $11 billion with a net income of $871 million in the first nine months of the fiscal year.
  • UPMC also reported $178 million in operating income in that time period, which was $94 million less than the same period last year. The health system explained that the difference came from payer Highmark paying UPMC about $200 million in the second quarter of 2016, which was part of an arbitration settlement involving cancer payments, reported TribLive.
  • UPMC also reported that its UPMC Insurance Services Division grew by 7% to 3.2 million members. UPMC’s facility admissions and observations also increased by 9%.

UPMC said its financial results enable “continued support of scientific research and education,” including providing nearly $2 billion to the University of Pittsburgh Schools of the Health Sciences over the past five years.

The Pittsburgh-based company is one of the only health systems that is connected to a health insurance plan, so comparing UPMC’s performance with other health systems in the country is tricky.

In a press release, UPMC touted its commitment to scientific research and education. “In the midst of an evolving and challenging environment in health care and academic medicine, it is essential to UPMC’s mission of advancing patient care to support the education and training of our future health care researchers and innovators,” said Robert A. DeMichiei, UPMC executive vice president and chief financial officer.

And it’s true it’s a challenging environment for health systems right now. UPMC’s performance bucks the recent trend where hospitals and health systems are noticing a decrease in operating income. “Business is challenging right now and many systems are stressed and many, like we are, are really paying attention to how we run our business, maybe in a way like we’ve never done before,” Intermountain CEO and President Dr. Marc Harrison recently told Healthcare Dive.

Interesting note: UPMC’s uptick of patient admissions is in line with AHA data that show larger hospitals (500+ beds) saw an increase in admissions versus declining admissions among small and mid-sized hospitals. Between 2011 and 2013, admissions for small hospitals fell while admissions for large hospitals rose. The data could point to the trend of a consolidating hospital industry which shows larger hospitals/systems seeing more admissions, and therefore greater revenue.

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