UPMC Shows Strong Financial Results in Challenging Environment
- UPMC’s operating revenues grew by $957 million to $8.5 billion, with operating income of $176 million and a net income of $553 million.
- UPMC’s operating EBIDA – or cash flow income – was $514 million.
- UPMC Health Plan total membership has grown to more than 2.3 million.
- UPMC continues to advance patient care with capital expenditures and business investments totaling $335 million in the first nine months.
- UPMC’s $176 million pension contribution maintains its funded status and protects employees’ retirement plans.
PITTSBURGH, May 8, 2014 – UPMC’s financial results for the first nine months of fiscal year 2014 show the region’s leading health care provider in a strong position to continue providing its world-class clinical care for all of the communities it serves, in the midst of a challenging environment.
UPMC’s operating revenues increased by $957 million to $8.5 billion for the first nine months, 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
$176 million for the period ending March 31, 2014. UPMC’s excess of revenues over expenses (net income), including $107 million related to the inherent contribution recorded due to the UPMC Altoona affiliation, was $553 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 $514 million.
“The changing marketplace for health care is highly volatile and uncertain both nationally and locally,” said Robert A. DeMichiei, UPMC senior vice president and chief financial officer. “However, the competitive market is beneficial to employers and the community. In western Pennsylvania, it’s the most important turning point, ever. UPMC’s high-quality care is a core asset within this environment where there is real choice and competition.”
UPMC Health Plan now has more than 2.3 million subscribers, growing 9 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 18 percent while inpatient volume grew 9 percent. Physician revenue grew by 11 percent. The number of employed physicians increased 4 percent to 3,526.
During the first nine months, UPMC spent $335 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 $176 million to its pension plans.
UPMC’s diversified investment reserve portfolio stands at $4.3 billion, with a 10.5 percent return for the first nine months. UPMC maintains a long-term investment perspective. “Our long-term investment strategy has helped us prepare for the challenging environment related to the changing marketplace,”
said C. Talbot Heppenstall Jr., UPMC senior vice president and treasurer.
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 2.3-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.