UPMC First Quarter

Michael Roknick, The Herald, Sharon, Pa.
·2 min read

May 27—NEW CASTLE — Mirroring others in its industry, UPMC got financially bruised in the first quarter due to a downturn in investments and operating income. But the system continues to invest in the local healthcare system, administrators said Thursday.

UPMC officials released the first quarter financial report for the non-profit, Pittsburgh-based healthcare and insurance provider Thursday at UPMC Jameson's New Castle hospital. Operating income fell 83 percent in the first quarter to $50 million compared to $288 million in the same year-ago period.

UPMC recorded a loss in revenue after expenses of $242 million in the first quarter, a hefty $795 million drop from a year ago when it had a gain of $574 million. Revenue loss occurs when a company makes less from operations than expected due to external and internal factors.

That's what happened to UPMC.

Its drop in revenues was due to downturns on its investments, said Edward Karlovich, the company's chief financial officer. Also, the numbers reflect UPMC isn't immune to higher costs socking the nation due to the punishing effects of the COVID-19 pandemic that boosted operating expenses, along with a dip in patients.

"We are starting to see patient volumes returning in the second quarter," Karlovich said.

UPMC isn't alone on having a rough first quarter. Across the state Universal Health Services, a for-profit healthcare provider based in King of Prussia, saw its quarterly net income drop 26.4 percent from a year-ago with operating income falling 21.2 percent.

In all of 2021 UPMC netted $1.46 billion, a 36 percent hike over 2020.

Dr. Beth Piccione, president of UPMC Horizon — which has campuses in Farrell and Greenville — and Jameson, spoke of the financial boost UPMC gave to the local hospitals.

A New Castle native, Piccione said Jameson's outlook would have been bleak if UPMC hadn't bought the once-independent hospital in 2016. Since then UPMC has invited $100 million in Jameson, including upgrading existing services along with adding new ones. Total investments over that period for Jameson and Horizon was $150 million, she said.

Horizon's Farrell hospital now has the only hospital birthing center in Mercer and Lawrence counties. Coming soon is a UPMC Children's Hospital emergency department affiliation with Jameson.

"We're very excited about that," Piccione said.