UPMC sees gains; CFO not satisfied

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UPMC saw growth in three key areas -- patient volume, health plan membership and core operating earnings -- during the first quarter of the current fiscal year.

But with a slim 1.9 percent operating margin for the region's largest health system, "We need to do a little better, actually," said Robert DeMichiei, UPMC's chief financial officer, at a media briefing on the unaudited financial results held Wednesday at UPMC headquarters in the U.S. Steel building.

"We're managing efficiently and we're managing effectively, but it's not easy," he said.

Patient admissions and observations at the 22 UPMC hospitals rose from 65,931 for the July-September period in 2012 to 66,817 this year. Those figures do not include Altoona Regional Hospital, which affiliated with UPMC on July 1.

Mr. DeMichiei also reported that membership in UPMC Health Plan, the nonprofit's insurance division, is up 14 percent with total participation now at more than 2.2 million members.

The health system reported $167 million in operating earnings before figuring in interest, depreciation and amortization charges, and $54 million in operating income. Operating income is down from $72 million a year ago, which Mr. DeMichiei attributed largely to a claims restatement of $10 million due to an overestimation of expected revenue from future claims.

The number of full-time UPMC employees, he said, is "up slightly" with the additional jobs coming in growth areas such as insurance services and information technology.

Despite what he described as "a very, very tough market," Mr. DeMichiei added, "we think we're well-positioned for the rest of the year."

Steve Twedt: stwedt@post-gazette.com or 412-263-1963.

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