Becker's Hospital Review

76 FINANCE UPMC Gets Boost From 20% Spike in Health Plan Membership By Ayla Ellison P ittsburgh-based UPMC report- ed strong financial results for the first six months of its fiscal year 2016, including a 17.5 percent year-over-year increase in health plan revenue. Fueled by growth in insurance services, UPMC's operating revenues grew to $6.3 billion in the first half of the fiscal year, up 6.2 percent from the same period a year earlier. UPMC Health Plan membership grew 20 percent over the past year to 2.9 million members. UPMC's operating income increased 4.7 percent year over year to $201 million in the first six months of FY 2016. e health giant's operating margin dipped slightly to 3.2 percent, down from 3.3 percent in the same period of the year prior. UPMC Executive Vice President and CFO Robert A. DeMichiei was pleased with the system's financial results. "UPMC's solid financials sustain our ongoing ability to keep reinvesting in clinical care advances and scientific innovation," he said. "Over the last decade, UPMC has reinvested more than $5 billion to upgrade its tech- nology, facilities and infrastructure, all toward ensuring top-quality care and the best patient experience." n CHS Reports Surprising $83M Loss as Admissions Fall By Ayla Ellison C ommunity Health Systems re- ported a loss for the fourth quarter of 2015, as the Frank- lin, Tenn.-based for-profit hospital op- erator's profits were dragged down by lower admissions and costs asso- ciated with its 38-hospital spinoff. CHS reported operating revenue fell to $4.8 billion in the final quar- ter of 2015, down 2.4 percent from the same period of the year prior. The slump in revenue was partially attributable to a 3.6 percent decrease in total admissions year over year. When adjusted for outpatient activity, admissions were down 1.5 percent in the fourth quarter of last year, com- pared to the same period of 2014. CHS Chairman and CEO Wayne T. Smith said patient volume in the fourth quarter of 2014 was strong due to higher admissions and emergency room visits attributed to respiratory illness and the flu. Certain adjustments affected CHS' financial results in the fourth quarter, including an increase in its allow- ance for doubtful accounts and ex- penses related to the planned spin- off of a new company. Last August, CHS announced plans for a spin-off transaction to create Quorum Health Corp. — a new, publicly traded company with 38 affiliated hospitals and related outpatient services in 16 states. The transaction is expected to close during the first half of 2016. Mr. Smith said CHS' financial results were also hurt by slower-than-expect- ed benefits from its 2014 acquisi- tion of Health Management Associ- ates in Naples, Fla. "It is taking longer than expected to achieve operational improvements in some of the former HMA markets; however, we continue to see oppor- tunities in these markets and remain convinced that performance will improve over time," said Mr. Smith. CHS ended the final quarter of 2015 with a loss of $83 million, down from a profit of $100 million a year earlier. n Cleveland Clinic Reports Record $481M Operating Income By Brooke Murphy I n his annual state of the clinic speech, Cleveland Clinic CEO Delos "Toby" Cosgrove, MD, said the hospital network reported a record operating income of $481 million in 2015, re- ports The Plain Dealer. Below are four things to know about Cleveland Clinic's latest financial results. 1. The hospital network reported total revenue of $7.2 billion in 2015, a 7 percent increase over 2014. 2. The $481 million in operating income represented a 3 percent in- crease over the year prior. 3. Dr. Cosgrove largely attributed the record operating income to cost-sav- ing measures implemented across its facilities, including a program in which employees and physicians were encouraged to share cost-saving suggestions for administrative and clinical procedures. "Over the last three years, we have re- duced the cost of providing care some $600 million," Dr. Cosgrove said in his speech, according to The Plain Dealer. "Had we not been able to make that reduction in our cost and efficiency, we would have had one of the worst finan- cial years that we have ever had." 4. Thanks to Cleveland Clinic's con- tinued expansion efforts, the hospital network saw outpatient visits increase by 13 percent, inpatient admissions increase by 17 percent and emergency visits jump 29 percent during 2015. Last year, Cleveland Clinic added Akron (Ohio) General Hospital to its network. The system is expanding in Ohio, building new facilities in Cleveland and Avon, and it is also extending its foot- print internationally with a new facility in London. n

• Cover
• _GoBack