UPMC revenue rises by $1 billion
Share with others:
The University of Pittsburgh Medical Center saw its operating revenue increase by nearly $1 billion in the recently completed fiscal year, reaching a total of $9 billion for the first time and marking a 43 percent increase since 2007.
While $200 million in added revenue came from UPMC's Feb. 1 acquisition of Hamot Medical Center in Erie, "most of it is from the organic growth of the organization," said Robert DeMichiei, UPMC's chief financial officer, at the health system's quarterly financial briefing Friday at its Downtown headquarters.
The health system giant saw increases in patient admissions and observations, a 29 percent growth in outpatient revenue and higher physician service revenue. In addition, UPMC's investment reserve portfolio had an 18.3 percent return in fiscal 2011, with a June 30 value of $3.6 billion.
The unaudited report shows that UPMC's operating income, or operating profit, was $406 million for the year, which when combined with the other financials, made for what Mr. DeMichiei described for "very strong results."
UPMC's earnings before interest, depreciation and amortization was $801 million, up from $630 million in fiscal 2010. These funds are used for running the system's hospitals, as well as funding capital expenditures such as the UPMC East hospital currently under construction in Monroeville.
Mr. DeMichiei said the system expected to hire 350 for the new hospital by the time it opens in July, then add another 150 positions the following year. Systemwide, UPMC anticipates adding about 2,000 new jobs, from customer service representatives to physicians, with the largest number -- from 500 to 600 new jobs -- in clinical support positions such as diagnostic technicians and dietary staff.
Those new jobs will be in addition to 1,900 new full-time jobs created during fiscal 2011, which had followed the shedding of 243 positions in fiscal 2010.
Enrollment in its insurance plan, UPMC Health Plan, grew 8.6 percent, from 1.46 million members in fiscal 2010 to 1.58 million in 2011, a trend spokesman Paul Wood said was expected to continue despite the emergence of other major insurers such as Aetna, Cigna, United HealthCare and HealthAmerica, all of whom signed expanded contracts with the UPMC network earlier this year.
"They'll be fighting for those people leaving Highmark so they can keep their doctor," said Mr. Wood, referring to UPMC's announced intention not to renew its contract with the region's largest insurer when it expires in July.
For the final three months of fiscal 2011, UPMC recorded $91.83 million in operating profit, up from $60.73 million for the same period a year earlier, and $2.39 billion in total revenue from operations, compared with $2.03 billion in the final quarter of fiscal 2010.
Mr. DeMichiei said an audited report of UPMC financials would be posted on the health system's website on Sept. 9.
First Published August 27, 2011 12:00 am