UPMC on pace for record-breaking revenue in 2021, health giant took in $18B through September

UPMC is poised to log another record year of billion-dollar revenue growth in 2021, records made public Tuesday show.

The health giant headquartered in Downtown Pittsburgh’s U.S. Steel Tower raked in $18 billion between January and September — about $1 billion more than it made by this time last year, according to UPMC’s third-quarter unaudited financial reports.

Total revenue for the first nine months of the year amounted to $4 billion more than UPMC took in over the same period three years ago and more than $6.5 billion than it did by this time in 2017, records show.

Net income after deducting expenses totaled $1.2 billion for the nonprofit health care provider and insurer, which must pump profits back into operations, investments, charity care and community benefits.

UPMC’s provider side — spanning 40 hospitals and more than 800 doctor’s and outpatient offices — saw notable gains compared to last year, when early covid-related government lockdowns halted non-urgent procedures and plummeted volumes for several months.

Meanwhile, UPMC’s insurance rolls grew by about 4% to more than 4.1 million members, up from about 3.5 million at the same time in 2018.

Hospital volumes back to pre-covid levels

Compared to this time last year, outpatient revenue has increased by 17%, physician revenue is up by 12% and admissions and observations have climbed by 5%.

The pandemic still could pose unforeseen needs and costs, according to UPMC’s latest financial statements.

In the third-quarter filings, UPMC officials said that “although volumes have generally rebounded to near pre-covid-19 levels, UPMC and its subsidiaries have and expect to continue to experience some impact on operations as a result of the covid-19 pandemic.”

The financial boons come as UPMC continues to advance ambitious expansion plans, from additions to existing facilities to the nine-story tower under construction at UPMC Mercy hospital for vision care and rehabilitation outpatient programs.

UPMC spent $552 million on capital projects through September. Its cash and investment account is approaching $11 billion.

RELATED: UPMC Mercy hospital’s $510M expansion on track for spring 2023 opening

Executives were not available for comment on Tuesday.

Officials said in a statement that the ongoing expansions and renovations reinforce the health system’s “focus to advance world-class clinical care even during a pandemic.” More money also is being invested into technology and data-driven analytics to help “transform the patient experience across the spectrum of health care,” officials said.

So far this year, the health system has provided more than 700,000 doses of the covid-19 vaccine and “more monoclonal antibody infusions than any other health system in the commonwealth,” Chief Financial Officer Karlovich said in a statement.

“Our leadership role as the pandemic evolves stems from our steadfast support of our outstanding dedicated employees who provide this care every day,” Karlovich said. “We have maintained various pay protection policies, merit increases and physical safety assurances for our employees throughout the crisis.”

Employees ‘thanked’ with bonuses while some strike

UPMC employs more than 92,000 people, making it Pennsylvania’s largest non-government employer.

Karlovich reiterated that earlier this month, UPMC announced $300 million in employee-related investments, including doling out $500 bonuses to non-senior-level employees as “a special ‘thank-you’ for their service throughout this unprecedented period in health care.”

RELATED: UPMC touts growing North Hills hospital hub, $12B in midyear revenue

Last year, even amid the covid-19 pandemic and ensuing monthslong restrictions on non-urgent procedures, UPMC generated $23.1 billion.

UPMC has been repaying some of the financial assistance it received in the form of advanced payments issued by the federal government to assist with cash flow during government-ordered shutdowns and covid-related costs, and it plans to continue doing so next month and in 2022, the filings show.

The combination of increased insurance revenue, federal assistance and more patients seeking care in recent years helped to more than offset last year’s losses.

By August, UPMC had reported midyear revenue of $12 billion and net income of $1.1 billion, a major swing from the $165 million loss reported between January and July 2020.

Having both insurance and provider arms helped systems such as UPMC — as well as Pittsburgh-based competitor Highmark — offset hospital losses with the correlating drop in insurance claim payouts.

UPMC’s provider arm took in $607 million more than it did by this time last year, while its insurance arm made $206 million less than this time last year “due largely to an increase in medical claims expenses in 2021” compared to the 2020 slowdown, the system’s self-reported financial filings said.

RELATED: Why ‘bailed-out’ hospital giants like UPMC thrived in 2020 while others floundered