Health plan growth buoys UPMC financial results

UPMC’s growing health plan membership has prompted a calendar change for the Pittsburgh health giant.

After years, if not decades, of operating on a fiscal year basis ending June 30, UPMC’s provider arm is now tracking its finances on a calendar year, CFO Robert DeMichiei said Wednesday.

“We basically wanted to align it with the insurance division.”

The move acknowledges the approaching revenue parity of UPMC’s 20-year-old insurance division with its internationally acclaimed health services.

In 2017, insurance products brought in $7.7 billion in operating revenue, a figure projected to reach $8.8 billion this year, compared with $10 billion last year from health services.

The insurance division now has 3.4 million members, including 1.2 million in the 29-county Western Pennsylvania region. “We think we’ll continue to see good growth,” Diane Holder, president of the insurance division, said during a quarterly financial briefing at the UPMC corporate offices in the U.S. Steel Tower, Downtown.

UPMC’s Medicare Advantage membership currently numbers 174,136, moving past Highmark’s total of 161,222 members.

The health services division saw its own degree of growth, seeing increases in hospital admissions and observations as well as emergency room visits.

Combining the health services and insurance division totals, UPMC recorded operating income of $245 million for 2017, up from $215 million the year before, and $15.6 billion in operating revenue, compared with $13.4 billion in 2016.

Mr. DeMichiei said plans for three new specialty hospitals remain on track, with ground-breaking for the UPMC Vision and Rehabilitation Hospital next to UPMC Mercy in Uptown planned for later this year.