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UPMC's Successful and Growing Hospital Network Advances World-Class Care to Patients in Their Communities

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Paul Wood
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Susan Manko
Vice President

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UPMC Reports Strong Financial Performance for First Nine Months of Fiscal Year 2016

UPMC First Nine Months Fiscal Year 2016 Results:

  • Operating revenues grew to $9.5 billion, with operating income of $272 million.
  • UPMC's operating EBIDA – or cash flow income – was $615 million.
  • Total membership in UPMC Insurance Services Division, now the largest medical and behavioral health services insurer in western Pa., increased 13% to more than 2.9 million.
  • UPMC continues to advance patient care with capital expenditures and business investments totaling $305 million.
  • UPMC's $90 million pension contribution maintains its funded status and protects employees' retirement plans.
  • $5.1 billion cash and investments provides for long-term sustainability.

PITTSBURGH, May 11, 2016 – UPMC reports continued strong financial results for the first nine months of fiscal year 2016, allowing UPMC and its growing hospital and provider network to extend world-class care for patients in their own communities.      

"The UPMC model is successful and unique in that it is the country's largest provider-led IDFS (integrated delivery and finance system) with a leading academic medical center at its core integrated with its own growing insurance division, resulting in high-quality, low-cost patient care," said Robert A. DeMichiei, UPMC executive vice president and chief financial officer.

"We can operate each of our hospitals as part of a large, vibrant and nimble network that continues to expand into communities where there is demand and need for it," said Leslie Davis, UPMC senior vice president, and executive vice president and chief operating officer, UPMC Health Services Division.

Adding to its nationally ranked flagship Oakland-based hospitals, UPMC has a proven track record of success with hospital affiliations, including UPMC Mercy, UPMC Hamot and UPMC Altoona. "When we partner with a hospital, we make that hospital better not only to survive in its community but also to invest in the community and share in our vision of advancing world-class care for patients close to where they live," added Ms. Davis. 

In the first nine months of the fiscal year, UPMC spent $305 million on capital expenditures and business investments to advance patient care. Over the last decade, UPMC has reinvested more than $5 billion to upgrade its technology, facilities and infrastructure, all toward ensuring top-quality care and the best patient experience. UPMC provides more than $888 million each year in IRS-defined community benefits, which are free programs and services and free or reduced-cost care.

Operating income, which is reinvested in programs that support UPMC's mission of advancing patient care, was $272 million for the period ending March 31, 2016. 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 – was $615 million, on track to exceed $500 million for the 12th consecutive year.

For the first nine months of the fiscal year, UPMC's operating revenues increased to $9.5 billion, due primarily to a 13 percent growth in insurance services. UPMC Insurance Services Division now has more than 2.9 million subscribers and is the largest medical and behavioral health services insurer in western Pennsylvania.

In April 2016, UPMC for You was selected to enter into negotiations to develop a 3-year agreement with the Pennsylvania Department of Human Services (DHS) to offer services to Medicaid recipients enrolled in HealthChoices, Pennsylvania's mandatory Medicaid managed care program, in all five regions of the Commonwealth. The agreement is scheduled to begin in 2017.

"We are honored to have been chosen to offer services statewide. We support DHS's efforts to move to value-based arrangements from the traditional fee-for-service payment in order to improve the health and lives of those we serve," said Diane Holder, UPMC executive vice president and president, UPMC Insurance Services Division. "We pride ourselves on offering innovative services and solutions for members and providers as well as award-winning customer service."

As Pennsylvania's largest non-governmental employer, UPMC maintains its commitment to making sure that the retirement plans of its more than 60,000 employees system-wide are fully funded and contributed $90 million to its pension plans.

About UPMC

A world-renowned health care provider and insurer, Pittsburgh-based UPMC is inventing new models of patient-centered, cost-effective, accountable care. It provides more than $888 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 60,000 employees, more than 20 hospitals, more than 500 doctors' offices and outpatient sites, and a more than 2.9 million-member Insurance Services Division, the largest medical and behavioral health services insurer in western Pennsylvania. Affiliated with the University of Pittsburgh Schools of the Health Sciences, UPMC ranks No. 13 in the prestigious U.S. News & World Report annual Honor Roll of America's Best Hospitals. UPMC Enterprises functions as the innovation and commercialization arm of UPMC while UPMC International provides hands-on health care and management services with partners in 12 countries on four continents. For more information, go to

Additional Resources

UPMC Quarterly Disclosure
For the period ended
March 31, 2016 (PDF)

FY2016 Q3 Financial Results
Support slides (PDF)