Dive Brief:
- UPMC reported a small operating loss but higher revenues for the quarter ending March 31. The Pittsburgh-based regional healthcare system attributed the red ink to the COVID-19 pandemic and suggested the next quarter could be even tougher.
- The healthcare services division “experienced significant reductions in patient volumes during the last two weeks” of the quarter, representing about a $ 150 million loss in revenue for that time period, UPMC said in its unaudited financial statement posted Friday. The system said it is receiving about $ 255 million from the Coronavirus, Aid, Relief, and Economic Security Act.
- UPMC’s health insurance plan also saw increased revenue due to a significant rise in its membership, but its operating income dropped by 56%.
Dive Insight:
UPMC, which operates 40 hospitals in Pennsylvania, New York and Ohio, has been growing steadily in recent years. However, its growth in the first quarter collided head-on with the COVID-19 pandemic.
The system posted a $ 41 million operating loss on revenues of $ 5.5 billion, according to the financial report. For the first quarter of 2019, it reported an operating profit of $ 44 million on revenue of $ 5.1 billion. The system did not disclose its net numbers.
Investment losses reached nearly $ 800,000, compared to a gain of more than $ 224,000 in the prior-year period.
While overall outpatient revenue increased 1% during the quarter, revenue from physician services was down 3% while hospital admissions and observations dropped by 4%.
UPMC is the latest nonprofit healthcare provider to report losses blamed on COVID-19, although its numbers are not as big as those reported by Kaiser Permanente and CommonSpirit Health, both of which reported quarterly losses exceeding $ 1 billion apiece.
UPMC did note in a statement that its business was moving back toward normal in recent weeks.
“During the COVID-19 crisis, UPMC’s leaders, scientists, clinicians and front-line workers throughout our … system were prepared to care for the potential surge of COVID-positive patients while also safely providing essential, life-saving care to our non-COVID patients,” Edward Karlovich, UPMC’s interim chief financial officer, said in a statement. “However, many patients who had scheduled surgeries and procedures before the crisis postponed their care. With assurances that all our facilities are safe for all patients and staff, we are seeing our patients returning for their essential care that had been postponed and our current volumes are beginning to approach near-normal levels.”
The system also noted that it was sitting on $ 7 billion in cash and liquid investments. It reported 99 days cash on hand.
UPMC’s insurance division remained in the black, but was under strain. Its operating income was $ 39 million — compared to $ 89 million for the first quarter of 2019. However, membership grew by 7% during the quarter to 3.8 million enrollees.