Pittsburgh-based UPMC, a 40-hospital system, has reported a 2023 operating loss of $198.3 million (-0.7% operating margin) on revenue of $27.7 billion.
Those figures compare with a $162.1 million operating gain on revenue of $25.5 billion in 2022. Expenses in 2023, totaling $27.9 billion, were approximately 10% up on 2022. That included a 13.6% jump in insurance claims expenses.
The healthcare system's measure of inpatient activity grew 3% over the previous year while average outpatient revenue per workday rose 10% and average physician revenue per weekday grew by 9%.
The system grew its UPMC for Life insurance membership by 15,500 in 2023 and into 2024—maintaining its leadership position in Western Pennsylvania in its Medicare Advantage Individual and Special Needs plans—but continued to see its medical expense ratio for the trailing twelve months tick upward, from 86.3% as of September to 86.9% at the end of the year.
The system benefited from a $424.8 million gain in its investing and finance activities compared with a $1.1 billion loss in 2022.
UPMC’s total long-term obligations were $6.6 billion as of December 31, 2023 compared with $5.2 billion at the same date in 2022. Its days cash on hand totaled 109, the same as in 2022.
During the year, UPMC opened its new $510 million Mercy Pavilion in Pittsburgh, home to the UPMC Vision Institute and the UPMC Rehabilitation Institute which offers specialized care for brain injury, spinal cord injury, stroke and musculoskeletal pain patients.
The health system also continued construction on the new UPMC Presbyterian facility, a $1.5 billion 17-story hospital scheduled for completion in 2026. The 636 private room facility in the Oakland area of Pittsburgh will be the city’s largest ever healthcare building, UPMC said.
In November, UPMC began the construction of a $62 million heart institute at its UPMC Children’s Hospital.