UPMC more than doubles operating income

UPMC rebounded smartly from the depths of the COVID-19 pandemic in December, more than doubling operating income and finishing the first six months of the year with $1.1 billion left after all expenses were paid.

The hospital and health insurance giant on Thursday reported operating income of $605 million for the six months ending June 30, far exceeding the $172 million reported for the same period in 2020. Revenue from core services rose 9.5% to $12.1 billion between Jan. 1 and June 30 from $11.1 billion for the previous year.

Excess revenue over expenses was $1.1 billion for the six months, up from a loss of $165 million for the same period a year ago. The operating and income gains drove UPMC’s operating margin to 4.3% for the period, up from 0.7% a year ago.

“Our volume came back earlier in the year and we’ve had solid financial results from that,” Chief Financial Officer Edward Karlovich said.

Enrollment in UPMC’s Insurance Services exceeded four million members, up 5%, as of June 30.

Hospital medical-surgical admissions and observations increased 8% compared to the same period in 2020. The hospital system giant had $10.4 billion in cash and investments.

Thursday’s briefing was held at UPMC Passavant Hospital, where doctors and hospital officials touted the extension of UPMC’s best known branded medical services — UPMC Magee- Womens and UPMC Children’s Hospital — to the McCandless campus, weeks before the opening of a competing hospital nearby.

Allegheny Health Network plans to open a 160-bed hospital in Pine 6 miles away in September.