Operating income at University of Pittsburgh Medical Center (pdf) in the first quarter ended Sept. 30 dropped 53.5 percent, from $155 million last year to $72 million this year, due to non-recurring meaningful use payments, physician recruitment costs and pressure from commercial payors.
UPMC received $28 million in meaningful use funds last year, which were not replicated this year. The health system also invested $25 million in physician recruitment efforts — UPMC now employs more than 3,300 physicians — and commercial insurance rates compressed income by another $15 million.
UPMC CFO Robert DeMichiei said in a news release that despite the drop in operating income, the quarter was still very positive for the health system, which has been "able to run operations efficiently and provide high-quality clinical care in the midst of global economic challenges and planning for the future."
Total operating revenue increased 1.6 percent in the first quarter of FY 2013, from $2.41 billion to $2.45 billion. While operating income fell, excess of revenues over expenses — or true profit — actually stood at $180.2 million compared with a $120.1 million loss in the first quarter of FY 2012.
Also in the three months ended Sept. 30, UPMC recorded a 4 percent increase in medical-surgical admissions and observation cases, a 7 percent rise in hospital outpatient revenue and an 18 percent increase in its health plan membership.
UPMC received $28 million in meaningful use funds last year, which were not replicated this year. The health system also invested $25 million in physician recruitment efforts — UPMC now employs more than 3,300 physicians — and commercial insurance rates compressed income by another $15 million.
UPMC CFO Robert DeMichiei said in a news release that despite the drop in operating income, the quarter was still very positive for the health system, which has been "able to run operations efficiently and provide high-quality clinical care in the midst of global economic challenges and planning for the future."
Total operating revenue increased 1.6 percent in the first quarter of FY 2013, from $2.41 billion to $2.45 billion. While operating income fell, excess of revenues over expenses — or true profit — actually stood at $180.2 million compared with a $120.1 million loss in the first quarter of FY 2012.
Also in the three months ended Sept. 30, UPMC recorded a 4 percent increase in medical-surgical admissions and observation cases, a 7 percent rise in hospital outpatient revenue and an 18 percent increase in its health plan membership.
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