5/6/2011
- UPMC’s operating revenues grew by $599 million to $6.6 billion, with an operating income of $313 million.
- UPMC’s operating EBIDA – or cash flow income – of $605 million is on target to exceed $700 million for fiscal year 2011.
- UPMC’s $3.4 billion diversified investment reserve portfolio provides for long-term sustainability.
- UPMC continues to grow and invest in the region, with $304 million in capital expenditures in first nine months and nearly $500 million planned for this fiscal year; more than 1,300 new jobs are being created in fiscal year 2011.
- UPMC’s financial strength allows it to provide more than a half-a-billion dollars in community benefits.
PITTSBURGH, May 6 – UPMC’s continued strong financial results through the first nine months of fiscal year 2011 support UPMC’s deep commitment to provide outstanding patient care services while caring for the health of the region’s communities and boosting the economy of western Pennsylvania.
UPMC’s operating revenues increased by $599 million to $6.6 billion for the period (July 1, 2010 through March 31, 2011). Operating income grew by $134 million to $313 million. Rating agency operating income increased from $89 million to $215 million for the period, which equates to a 3.3 percent rating agency margin.
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 $605 million for the first nine months and are on target to exceed $700 million for fiscal year 2011.
These results enabled UPMC to spend $304 million in capital expenditures to enhance patient care through new technology, hospital and other facility construction and renovations – creating additional jobs and new programs for the residents of western Pennsylvania. UPMC expects to create more than 1,300 new jobs during fiscal year 2011.
“Our financial position at the third-quarter mark of this fiscal year allows UPMC to carry forward its mission of providing exceptional patient care and shaping tomorrow’s health system with reinvestments for clinical innovation, biomedical and health services research, and education,” said Robert A. DeMichiei, UPMC senior vice president and chief financial officer. “However, UPMC’s rating agency operating margin of 3.3 percent is below the median for our AA-rated peer group. UPMC must continue operating efficiently and further improve our margins to meet the increasing challenges of health care reform, global economic pressures and anticipated declining reimbursements.”
UPMC’s key operating metrics were up compared to the same period a year ago. Outpatient revenue was up 22 percent; UPMC Health Plan membership grew 7 percent to nearly 1.6 million subscribers; hospital admissions and observation cases increased by 4 percent; and physician revenue increased by 2 percent. The number of employed physicians grew 5 percent.
UPMC’s diversified investment reserve portfolio stands at $3.4 billion, having achieved a 15.8 percent return for the first nine months of the fiscal year. “Because we have continued our preparedness to address the lingering uncertain economy and health care reform, UPMC does not need to draw on its long-term reserves to fund day-to-day operations, capital expenditures or employee pension investments,” said C. Talbot Heppenstall, Jr., UPMC senior vice president and treasurer. “UPMC maintains a long-term investment perspective.”
UPMC Provides More than a Half-a-Billion Dollars in Community Benefits
UPMC also released today a summary of its annual Community Benefits Report for fiscal year 2010. In its role as the region’s healthcare leader and with its ability to maintain strong financial results, UPMC was able to contribute a total of $563 million in community benefits. The $563 million includes: $218 million in uncompensated care for those without a means to pay and shortfalls in Medicaid programs; $101 million in community service programs and support for other non-profit organizations; and $244 million for investment in research and educating tomorrow’s health professionals. The report also shows that the total value of benefits provided to the community represents 13 percent of UPMC’s net patient revenue.
“We take our active community benefits leadership role very seriously.” Mr. DeMichiei said. “It is important to us and to the entire region that UPMC is able to continue to invest in the array of clinical, educational, social and economic projects that benefit the many diverse communities we serve.”
About UPMC
UPMC is a $9 billion global health enterprise with more than 50,000 employees headquartered in Pittsburgh, Pa., and is transforming health care by integrating more than 20 hospitals, 400 doctors’ offices and outpatient sites, a health insurance services division, and international and commercial services. Affiliated with the University of Pittsburgh Schools of the Health Sciences, UPMC is redefining health care by using innovative science, technology and medicine to invent new models of accountable, cost-efficient and patient-centered care. For more information on how UPMC is taking medicine from where it is to where it needs to be, go to www.upmc.com.