UPMC posted higher revenue in the first nine months of the year than in the same period in 2021, but the Pittsburgh-based health system's operating income declined significantly year over year, according to financial documents released Nov. 22.
Five notes:
1. UPMC, a 40-hospital system, reported revenue of $18.9 billion in the first nine months of the year, up from $18.3 billion in the same period of 2021, with its operating margin dropping from 4.4 percent to 1 percent year over year.
2. Expenses were also up year over year. The system reported operating expenses of $18.7 billion in the first nine months of the year, up from $17.5 billion a year earlier. Expenses increased across all categories, including supplies, insurance claim costs, and salaries and benefits.
3. UPMC ended the first nine months of the year with an operating income of $196 million, representing a 75.5 percent drop from $800 million the prior year.
4. UPMC posted a net loss of $1.1 billion for the nine months ended Sept. 30, compared to net income of $1.2 billion in the same period of 2021.
5. The system's loss from investing and financing activities totaled $1.2 billion for the three quarters, compared to a gain of $557 million in the same period a year earlier.
"We expect to see the pandemic’s lingering effects on healthcare, including higher costs to effectively address staffing, labor and supply chain challenges, and other operational expenses," Edward Karlovich, UPMC executive vice president and CFO, said in the release. "We will continue to invest in supporting our dedicated employees and strengthening our workforce. For example, we recently announced our nursing student loan forgiveness program, with additional incentives to build nursing and other career ladders, bolstered by key strategic partnerships with schools to help advance the pipeline for future healthcare professionals."