UPMC sees continuing growth to the east

Doesn’t plan a run at Philadelphia

Pittsburgh Post-Gazette

UPMC’s growing provider and insurance network enjoyed a profitable three months in the second quarter, reporting $84.3 million in operating income on $4.7 billion in revenue for the period ending June 30.

For the year, all key metrics — from operating revenue, to patient volume, to health plan memberships — are up yearover-year, said CFO Robert DeMichiei at UPMC’s quarterly financial briefing Thursday at its Downtown corporate headquarters in the U.S. Steel Tower.

Much of Thursday’s briefing focused on UPMC’s eastward growth, most notably the additions of UPMC Pinnacle last September and UPMC Susquehanna in 2016.

LeslieDavis, chief operating officer for UPMC’s health services division, said its central Pennsylvania provider and insurance holdings, including UPMC Altoona,accounted for $3.2 billion in revenue, or about one-third of the network’soverall total.

She added that the health system expects to continue expanding — although she ruled out going into the Philadelphia market on the provider side — as smaller hospitals seek partnerships from larger systems such as UPMC that offer millions in capital investment, cutting edge technology and high-end clinical services.

“Our mission is really to extend the high quality of care that we provide.”

UPMC’s operating income for the first six months of 2018 totaled $176 million, compared with $135 million the previous year, with operating revenue of $9.3 billion, up from $7.5 billion.

During that period, outpatient revenue rose 37 percent and physician revenue was up 13 percent while membership in UPMC’s insurance plan grew 7 percent, now totaling 3.4 million members.

One exception to the rosy financial report was a $41 million second quarter loss in its investment portfolio, whose value tends to fluctuate with the stock market. The reserve portfolio, which is not tapped for day-today operations, still had $7.6 billion in cash and investments as of June 30.