Insurance division buoys UPMC revenue gains, shows why providers are keen to add plans
UPMC reported net income of $616 million for the past six months, driven by a 14 percent jump in health plan revenue.
A 14 percent growth in UPMC's Insurance Services Division drove the health system's revenue gains over the past six months, the Pittsburgh-based provider said in its latest financial report. Membership on the insurance side of UPMC grew 7 percent to more than 3 million members over the past six months.
That makes UPMC the largest medical insurer in western Pennsylvania and second only to rival Pittsburgh insurer Highmark for shares of the Medicare Advantage market. UPMC has 140,815 members while Highmark has 168,953.
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"More and more businesses are offering alternative, affordable plans that allow their employees unfettered access to UPMC hospitals and physicians," said Robert A. DeMichiei, UPMC executive vice president and chief financial officer.
UPMC reported net income of $616 million. Operating income of $106 million was down from $201 million during the same period a year ago.
Last year, UPMC's operating income benefited from getting $46 million tied to its Highmark Oncology arbitration ruling.
In 2014, UPMC won the case in which Highmark decided to base its payments on how Medicare reimburses for services. It denied UPMC a higher reimbursement fee for chemotherapy because the offices where the chemotherapy took place were located in hospital outpatient centers.
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The remaining decrease in operating revenue was due to expense inflation, payer mix and physician and other investments, UPMC said.
UPMC spent $256 million on capital expenditures and business investments in facilities, equipment, technology, education and operational strategies to enhance patient care.
A $14 billion healthcare provider and insurer, UPMC integrates more than 25 hospitals and 600 doctors' offices and outpatient sites.
"Thriving as one of the nation's largest and most successful integrated health systems, UPMC has driven the transformation of western Pennsylvania from one of the most highly concentrated and least competitive insurance markets to one of the most competitive, pro-consumer markets with some of the lowest costs," said Diane P. Holder, UPMC executive vice president and president, UPMC Insurance Services Division.
Twitter: @SusanJMorse
