PITTSBURGH (TNS) — UPMC in its most recent financial disclosure blamed a $371 million operating loss on increased medical utilization and rising pharmacy costs.
The Pittsburgh-based health care giant reported a $371 million operating loss in the first nine months of 2024. That’s up from the $177 million loss reported during the same timeframe last year.
The loss comes despite increasing operating revenues. UPMC from January through September generated more than $22.2 million in revenues, up from about $20.6 million at the same point last year.
UPMC spent $109 million on restructuring costs in the first nine months of this year.
In April, it slashed 1,000 jobs, citing post-pandemic challenges. The cuts impacted just over 1% of UPMC’s more than 100,000-member workforce.
Earlier this month, UPMC announced it was laying off another 100 employees and eliminating 200 vacant positions in an effort to cut costs.
The health care system is the largest nongovernmental employer in Pennsylvania. It employs more than 5,000 physicians at more than 40 hospitals and 800 doctors’ offices and outpatient locations.
UPMC reported that its health services division in the first three quarters of this year saw operating income jump by $510 million compared to the year before. That doesn’t include restructuring costs.
But the insurance services side saw its operating results dip by $595 million over the same period.
UPMC has seen its insurance enrollment decline since last year. As of the end of September, it insures more than 4.1 million members, down from about 4.5 million at the same time last year.
The operating loss, UPMC said in its financial disclosure, is largely because an increasing number of health insurance members are accessing more medical services and drug costs — including those associated with GLP-1 drugs used to treat Type 2 diabetes and obesity.
“The increase is primarily due to improved patient volumes, decreases in contract labor expenses and the recognition of $235 million of other revenue from FEMA reimbursement of covid-19 related expenses,” the financial report said.
