UPMC’s Strong Financial Results Reflect Demand for UPMC’s Clinical Care Along with Growth in UPMC Insurance Membership
UPMC Calendar Year 2017 Results:
- Operating revenues grew to $16 billion.
- Net income reached $1.3 billion.
- UPMC Insurance Services Division, the largest medical insurer in western Pennsylvania, grew to 3.4 million members.
- UPMC continues to advance patient care with capital expenditures and business investments totaling $736 million.
- $7.5 billion cash and investments provides for long-term sustainability.
PITTSBURGH, March 1, 2018 — UPMC’s strong financial results for Calendar Year 2017 reflect the increasing demand for UPMC services along with the growth of UPMC insurance membership.
For the 12 months ended Dec. 31, 2017, UPMC’s operating revenues increased to $16 billion. Net income reached $1.3 billion, driven by strong operating and investing results, and augmented by the affiliation with UPMC Pinnacle, reflecting Pinnacle’s strong financial position being consolidated into UPMC operations.
Operating income, which is reinvested in programs that support UPMC’s mission of advancing patient care, was $245 million. UPMC’s Insurance Services Division—the largest medical insurer in western Pennsylvania—grew 8 percent to 3.4 million subscribers. UPMC’s admissions and observations increased 14 percent compared to a year ago.
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 $789 million.
UPMC spent $736 million on capital expenditures and business investments during the calendar year as it continues to make significant advancements in facilities, equipment, technology, education and operational strategies to enhance patient care. In November 2017, UPMC announced that it will invest $2 billion to create three new specialty hospitals for cancer, heart and vascular, and vision and rehabilitation.
“UPMC’s financial strength supports our preferred provider status in this region and enables us to continue investing back into the organization to meet the increasing demand for UPMC’s advanced care,” added Robert A. DeMichiei, UPMC executive vice president and chief financial officer. “Meanwhile, UPMC’s continued growth and emergence as the largest medical insurer in western Pennsylvania is extraordinary. Our successful provider-led IDFS (integrated delivery and finance system) model has resulted in this region’s clear shift from one the nation’s least competitive insurance markets to one of the most competitive, low-cost, pro-consumer markets,” added DeMichiei.
“We are increasingly seeing people choose their insurance specifically so they can have affordable access to UPMC’s physicians, facilities and services,” said Diane P. Holder, UPMC executive vice president and president, UPMC Insurance Services Division. “People’s choice of providers often drives their choice of insurers as long as the insurer is focused on customer service and is cost-competitive. This has been the key to UPMC’s growth and success, benefitting the region’s consumers and employers.”
The largest non-governmental employer in Pennsylvania, UPMC supports nearly one in four hospital jobs in the Commonwealth. UPMC maintains its assurance that the retirement plans of its 80,000 employees system-wide are fully funded with a $118 million contribution during the calendar year to its pension plans.
About UPMC
A $16 billion world-renowned health care provider and insurer, Pittsburgh-based UPMC is inventing new models of patient-centered, cost-effective, accountable care. UPMC provides more than $900 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 80,000 employees, more than 30 hospitals, 600 doctors’ offices and outpatient sites, and a 3.4 million-member Insurance Services Division, the largest medical insurer in western Pennsylvania. As UPMC works in close collaboration with the University of Pittsburgh Schools of the Health Sciences, U.S. News & World Report consistently ranks UPMC Presbyterian Shadyside on its annual Honor Roll of America’s Best Hospitals. UPMC Enterprises functions as the innovation and commercialization arm of UPMC, and UPMC International provides hands-on health care and management services with partners on four continents. For more information, go to UPMC.com.