UPMC’s Strong Financial Results Through Third-Quarter Fiscal Year 2010 Allow For Growth and Investment to Benefit Patients and the Community
- Operating revenues increased by $223 million to $6 billion. Operating income of $179 million is up 16% compared to same period year ago.
- Operating EBIDA – or cash flow income – of $473 million is on target to exceed $600 million for fiscal year 2010.
- $3 billion diversified investment reserve portfolio returned 15.2 % for the first nine months.
- UPMC continues to grow and invest in the region, with $330 million in capital expenditures and investments for patient care; another $125 million to fully protect its employees’ pensions.
- UPMC’s financial strength allows it to provide more than a half-a-billion dollars in community benefits.
PITTSBURGH, May 7 – UPMC’s financial results through the first nine months of fiscal year 2010 reflect continued strength and reinvestment to fulfill UPMC’s commitment to provide outstanding patient care and improve health in the communities it serves, while shaping the health system of tomorrow.
UPMC’s operating revenues increased by $223 million to $6 billion for the first nine months of fiscal year 2010. A compound annual growth rate of 10 percent over the last five years allows UPMC to pursue various growth and community initiatives. UPMC’s operating income, which is reinvested in programs to support UPMC’s mission, was $179 million for the first nine months, up 16 percent since the same period a year ago.
These results allow UPMC to make $330 million in capital expenditures and new business investments to enhance patient care through new technology, construction and renovations – creating additional jobs and new programs for the residents of western Pennsylvania. A $125 million pension contribution protects UPMC employees’ retirement assets.
UPMC’s earnings before interest, depreciation and amortization (EBIDA) – a key measure of financial performance and the ability to generate resources for reinvestment – were $473 million through the third quarter and remain on target to exceed $600 million for the fiscal year.
“In this economy, strong leadership and financial stability drive UPMC to continue its mission of providing outstanding patient care while smartly reinvesting in the future of the region,” said Robert A. DeMichiei, UPMC senior vice president and chief financial officer.
Through the third quarter, enrollment in UPMC’s insurance services grew 6 percent to 1.45 million members. Outpatient activity rose 3 percent; physician services activity increased 12 percent; the number of employed physicians grew slightly to 2,737; and total hospital admissions and observations approximated the prior year.
UPMC’s diversified investment reserve portfolio stands at $3 billion, returning 15.2 percent for the first nine months. “While in the past nine months UPMC’s investment portfolio has recovered much of the value it lost in fiscal year 2009, it’s important to keep a long-term perspective,” noted C. Talbot Heppenstall, Jr., UPMC senior vice president and treasurer. “Its value changes with market fluctuations, and with UPMC’s prudent fiscal management, we have not needed to draw on these long-term reserves to fund day-to-day operations, capital expenditures or employee pension investments.”
UPMC Provides More than Half-a-Billion Dollars in Community Benefits
UPMC also released today a summary of it annual Community Benefits Report for fiscal year 2009. In its role as the region’s healthcare leader and with its ability to maintain strong financial results, UPMC was able to contribute a total of $543 million in community benefits. The $543 million includes: $195 million in uncompensated care for those without a means to pay and shortfalls in Medicaid programs; $101 million in community service programs and support for other non-profit organizations; and $247 million for investment in research and educating tomorrow’s health professionals. The report also shows that the total value of benefits provided to the community represents 13 percent of UPMC’s net patient revenue.
“Our commitment to serving the needs of western Pennsylvania is the foundation of everything we do. Our more than half-a-billion dollars in community benefits helps strengthen our communities and fuel a brighter future for our region,” added Mr. DeMichiei.
UPMC is an $8 billion integrated global health enterprise headquartered in Pittsburgh, Pennsylvania, and is one of the leading nonprofit health systems in the United States. As western Pennsylvania’s largest employer, with almost 50,000 employees, UPMC is transforming the economy of the region into one based on medicine, research and technology. By integrating 20 hospitals, 400 doctors’ offices and outpatient sites, long-term care facilities and a major health insurance services division, and in collaboration with its academic partner, the University of Pittsburgh Schools of the Health Sciences, UPMC has advanced the quality and efficiency of health care and developed internationally renowned programs in transplantation, cancer, neurosurgery, psychiatry, orthopaedics and sports medicine, among others. UPMC is commercializing its medical and technological expertise by nurturing new companies, developing strategic business relationships with some of the world’s leading multinational corporations, and expanding into international markets, including Italy, Ireland, the United Kingdom, Cyprus, Qatar and Japan.