Becker's Hospital Review

10 CFO / FINANCE UPMC's operating income sinks 86% in first half of year By Ayla Ellison U PMC reported higher revenue in the first half of this year than in the same period of 2021, but the Pittsburgh-based health system's operating income declined year over year, according to financial documents released Aug. 23. UPMC reported revenue of $12.5 billion in the first six months of this year, up from $12.2 billion in the same period of 2021. Expenses also increased year over year. UPMC reported operating expenses of $12.4 billion in the first half of this year, up from $11.6 billion a year earlier. Expenses increased across all categories, including supplies and salaries and benefits. "roughout 2022, the continued effect of COVID-19, along with conditions in the labor and supply markets have resulted in cost growth in employment, staffing and other operating expenses in excess of revenue growth," UPMC management wrote in the financial filing. e health system ended the first half of this year with operating income of $81.9 million, down 86 percent from $604.6 million in the same period last year. UPMC's operating margin was 0.7 percent for the first half of this year, compared with 5 percent in the same period last year. UPMC reported a net loss of $844.1 million in the first half of this year, compared to net income of $1.1 billion in the same period of 2021. e system's loss from investing and financing activities totaled $865.9 million in the first two quarters of 2022, compared to a gain of $531.1 million in the same period a year earlier. n Tenet, Steward feud after $1.1B deal By Ayla Ellison T enet Healthcare and Steward Health Care System are battling in Delaware Chancery Court over whether Tenet can end information technology and data services to hospitals it sold to Steward last year, according to Law360. Tenet entered into an agreement to sell five Florida hospitals to Steward last June, and the $1.1 billion deal closed less than two months later. Since the transaction closed, Tenet and Steward have been involved in litigation, with both Dallas-based organizations arguing they're owed money. Tenet claims Steward owes nearly $18.2 million and is insolvent, while Steward alleges Tenet owes more than $16.3 million and is obligated to continue providing the data and IT services to the hospitals now owned by Steward, according to Law360. Vice Chancellor Sam Glasscock III ruled Aug. 1 that Steward and the five Florida hospitals must pay Tenet $2.8 million a month pending a final ruling in the case. The amount is based on the judge's assessment of the likelihood Tenet will prevail in the case, according to Law360. Mr. Glasscock wrote in his opinion that he finds it "readily conceivable" that Tenet will ultimately prevail on the issue of whether it has a right to terminate the services for nonpayment. The Florida hospitals included in the sale were Coral Gables Hospital, Florida Medical Center in Lauderdale Lakes, Hialeah Hospital, North Shore Medical Center in Miami and Palmetto General Hospital in Hialeah. n Intermountain's net income hits $2.7B By Ayla Ellison I ntermountain Healthcare saw its revenues increase in the first half of this year, and its merger with SCL Health fueled a significant increase in net income, according to recently released financial documents. The financial documents are the first Intermountain has filed since completing a merger with Broomfield, Colo.- based SCL Health in April. For the six months ended June 30, the 33-hospital system reported revenues of $6.5 billion, up 25 percent from $5.2 billion in the same period a year earlier. The health system's expenses totaled $5.9 billion in the first half of this year, up 31 percent from $4.5 billion in the first half of 2021. Intermountain ended the first two quarters of this year with operating income of $288 million, down from $461 million in the same period last year. After incorporating nonoperating income, including a $4.1 billion contribution from its merger with SCL Health, Intermountain ended the first six months of this year with net income of $2.7 billion. In the first two quarters of 2021, the health system's net income totaled $1.9 billion. Intermountain named Lydia Jumonville interim CEO on Aug. 19, about a week after announcing the departure of Marc Harrison, MD. Ms. Jumonville served as president and CEO of SCL Health before the system merged with Intermountain. n

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