Increase in patients, members lifts UPMC
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Citing increases in patient admissions, outpatient revenue and membership in its health plan, UPMC on Wednesday reported operating revenue of $4.76 billion for the first six months of its current fiscal year, up by $650 million from a year ago.
The number includes $243 million in revenue at Hamot Medical Center in Erie, which UPMC purchased last year.
One of the biggest increases for UPMC came in outpatient revenue, which was up 32 percent, but perhaps more notable was a 13 percent increase in patient admissions at a time when the number of total admissions in the region is going down.
"We are a shrinking marketplace," said Robert A. DeMichiei, UPMC's chief financial officer.
Presumably at least some of those additional admissions came at the expense of the financially ailing West Penn Allegheny Health System, which has seen drops in admissions.
Mr. DeMichiei also noted a 14.5 percent increase in UPMC Health Plan insurance memberships, now totalling 1.79 million, and "almost all of that volume moved from Highmark."
For its part, Highmark says its list of subscribers grew by 41,000 in 2011.
Highmark and UPMC have been at odds since the insurer stated its intention to acquire West Penn Allegheny, a transaction currently under regulatory review. UPMC has said it will not renew its contract with Highmark after terms of the current pact expire in July 2013.
About a year ago, UPMC began contracting with insurers Cigna, UnitedHealthcare, Aetna and HealthAmerca, and Mr. DeMichiei said the resulting competition has resulted in minimal or no premium increases locally -- and even some reductions -- or benefits such as two-year guaranteed pricing.
"Ultimately, it leads to lowering the cost of health care," he said.
At a press briefing at UPMC's U.S. Steel Tower headquarters, Mr. DeMichiei said UPMC Health Plan will launch eight different individual health plans that will include maternity and pharmacy coverage, with premiums as low as $75 a month. UPMC Health Plan previously did not offer coverage to individuals.
He also said the value of UPMC's investment portfolio dropped 4.5 percent to $3.6 billion due to market conditions, but he reiterated that those funds are not used for the health system's day-to-day operations.
The region's largest health system reported $220 million in operating income, up $14 million from a year ago, with operating earnings before interest, depreciation and amortization of $416 million, compared with $400 million for the same six-month period in 2010.
Outpatient revenue grew from $5.5 million for the last six calendar months of 2010, to $7.2 million in 2011. Meanwhile, physician service revenue went from $4.2 million to $4.4 million as the number of employed physicians increased from 2,849 to 3,240.
First Published February 2, 2012 12:01 am
