UPMC sees growth in health plan enrollment, inpatient visits

Les Masterson

Nov. 26, 2018

Dive Brief:

• UPMC reported a 22% operating revenue increase for the first nine months of the year compared to 2017. The Pittsburgh-based health system ended September with $2.5 billion in revenues for the year.
• Operating income for the integrated system dropped $6 million in that period, however, according to unaudited quarterly financial documents.
• UPMC reported a 20% increase in hospital medical-surgical admissions and observation cases over the first nine months. Hospital outpatient revenue also jumped 33%.

Dive Insight:

UPMC continued its strong financial standing. Both its health services and insurance segments improved revenues over a year ago.

With the health system continuing its trend of positive quarters, it's looking to possibly expand. UPMC purchased Harrisburg-based Pinnacle Health System last year, which helped expand its footprint in central Pennsylvania. The health system has been rumored to be interested in Akron, Ohio-based Summa Health, which is seeking potential partners.

Earlier this year, Leslie Davis, executive vice president and chief operating officer of UPMC's health services division, said the health system is looking to expand into neighboring markets and mentioned New York, Ohio and Maryland as nearby possibilities.

UPMC's health services segment, which includes its hospitals, physicians and outpatient care, enjoyed revenues of $8.8 billion through September. That was a $1.6 billion jump compared to a year ago and was connected to hospital affiliations and payer rate increases, the organization said.

The health services segment, however, saw a drop in operating income from $56 million last year to $22 million this year. UPMC said 2017 "benefited from non-recurring third-party payer settlements and the current year has expense inflation in excess of payer rate increases."

UPMC saw patient days grow as well. Medical-surgical increased from 828,427 a year ago to 988,036. Total patient days grew from less than 1.3 million in 2017 to nearly 1.5 million through September 2018. Total admission and observation cases jumped from 245,272 to 292,250 and overall occupancy increased from 82% to 84%.

Meanwhile, UPMC's insurance segment, which includes two HMOs, a PPO and a Medicare Advantage offering, reported enrollment growth. The plans ended September with 3.4 million members. Insurance revenues increased $1 billion to $6.7 billion. That growth came partly from picking up more than 156,000 members from a year ago.

The insurance segment's operating income increased by $50 million. That increase came from higher underwriting income connected to a bump in membership. UPMC said operating income would have been better if not for the loss of $40 million in Affordable Care Act risk adjustment payments.

https://www.healthcaredive.com/news/upmc-sees-growth-in-health-plan-enrollment-inpatient-visits/542863/