UPMC reports $177M loss so far this year

Health care giant UPMC reported an operating loss of $177 million during the first nine months of the year, attributing the decrease to rising labor costs and supply markets, increases in medical claims as more patients accessed care, pharmaceutical expenses and legal settlements.

The loss during the period that ended Sept. 30 is down from the same period a year ago, when UPMC reported $196 million in profit.

UPMC highlighted the $517 million in capital investments it has undertaken during the year, such as the UPMC Mercy Pavilion’s Vision and Rehab Institute and construction of the new UPMC Presbyterian scheduled to open in 2026.

“Last year, UPMC contributed $1.7 billion in community benefits, up from $1.5 billion the prior year. UPMC continues to provide more care to its vulnerable populations than any other health system in Pennsylvania,” said Fred Hargett, executive vice president and chief financial officer.

The health care industry, overall, has been plagued by staffing shortages, exacerbated by the covid pandemic. It’s an issue from hospitals to nursing homes.

UPMC noted it is raising the minimum wage for entry-­level positions to $18 per hour for nonunion workers by 2025.

Meanwhile, in May, two labor organizations asked the Department of Justice to investigate UPMC for alleged violations of federal antitrust law. SEIU Healthcare Pennsylvania and the Strategic Organizing Center say UPMC has used its position as the largest private employer in Pennsylvania to tamp down wages and trap workers in low-paying, unsafe conditions.

UPMC reported total operating revenue of $20.6 billion, up from $18.9 billion during the previous period.

The health care system employs 95,000, including more than 5,000 physicians, at its 40 hospitals and 800 doctors’ offices and outpatient sites.

UPMC Insurance Services covers 4.5 million members.