UPMC’s Financial Results for First Half of Fiscal Year Show Effects of Competitive Insurance Market
- UPMC’s operating revenues grew by $741 million to $5.7 billion, with operating income of $112 million and a net income of $451 million.
- UPMC’s operating EBIDA – or cash flow income – was $337 million.
- UPMC Health Plan total membership has grown to nearly 2.3 million.
- UPMC continues to advance patient care with capital expenditures and business investments totaling $206 million in the first half.
- UPMC’s $91 million pension contribution maintains its funded status and protects employees’ retirement plans.
PITTSBURGH, Feb. 6, 2014 – UPMC’s financial results for the first half of fiscal year 2014 show the effects of the new competitive insurance market.
UPMC’s operating revenues increased by $741 million to nearly $5.7 billion for the first half, due primarily to growth in insurance services, the affiliation with UPMC Altoona and increased patient volumes. Operating income, which is reinvested in programs that support UPMC’s mission, was $112 million for the period ending December 31, 2013. UPMC’s excess of revenues over expenses (net income) was $451 million.
UPMC’s earnings before interest, depreciation and amortization (EBIDA) – a key measure of financial performance and the ability to generate the necessary resources for reinvestment – were $337 million.
“The new competitive insurance market is beneficial to employers and the community,” said Robert A. DeMichiei, UPMC senior vice president and chief financial officer. “As we’ve been preparing for this expected ‘new normal,’ UPMC’s position remains strong in its ability to continue our mission of providing outstanding patient care for all of the communities we serve.”
UPMC Health Plan now has nearly 2.3 million subscribers, growing 11 percent since this time last year. UPMC’s other key operating metrics were up compared to the same period a year ago. In a continuously shrinking market with declining reimbursements, UPMC’s outpatient revenue was up 20 percent while inpatient volume grew 10 percent. Physician revenue grew by 13 percent. The number of employed physicians increased 3 percent to 3,486.
During the first half, UPMC spent $206 million in capital expenditures and business investments to advance clinical excellence, good science, smart technology and accountable care. As Pennsylvania’s largest non-governmental employer, UPMC maintains its commitment to ensuring that the retirement plans of its more than 62,000 employees system-wide are fully funded and contributed $91 million to its pension plans.
UPMC’s diversified investment reserve portfolio stands at $4.3 billion, with an 8.4 percent return for the first half. UPMC maintains a long-term investment perspective. “Our long-term investment strategy has helped us prepare for factors related to health care reform and other economic pressures,” said C. Talbot Heppenstall Jr., UPMC senior vice president and treasurer.
UPMC provided $887 million in IRS-defined community benefits during Fiscal Year 2013, including $268 million in charity care and programs for the poor, $238 million to improve health and quality of life in our region’s communities, and $381 million toward research and education. As part of its non-profit mission, UPMC currently cares for 40 percent of the patients in western Pennsylvania, and provides nearly 62 percent of the region’s charity care. The region’s non-UPMC hospitals care for 60 percent of patients but provide only 38 percent of the charity care.
A world-renowned health care provider and insurer, Pittsburgh-based UPMC is inventing new models of accountable, cost-effective, patient-centered care. It provides more than $887 million a year in benefits to its communities, including more care to the region’s most vulnerable citizens than any other health care institution. The largest nongovernmental employer in Pennsylvania, UPMC integrates more than 62,000 employees, 22 hospitals, 400 doctors’ offices and outpatient sites, a 2.2-million-member health insurance division, and international and commercial operations. Affiliated with the University of Pittsburgh Schools of the Health Sciences, UPMC ranks No. 10 in the prestigious U.S. News & World Report annual Honor Roll of America’s Best Hospitals — and No. 1 in Pennsylvania. For more information, go to UPMC.com.