UPMC takes $339 million operating loss in 2024
Continued inflation in the health care sector is taking its toll on the University of Pittsburgh Medical Center.
The organization reported an operating loss of $339 million for 2024 — an increase over the $198 million loss the system reported in 2023.
The majority of UPMC’s losses for 2024 came from its health services, where the system sustained a loss of $506 million. This more than wiped out the gains from UPMC’s insurance division, which made a profit of $167 million for the year.
It was the inverse of the two divisions’ performances in 2023, when its insurance division lost $297 million and canceled out the $99 million its health services division gained.
UPMC’s financial report pins much of the blame for the losses on rising medicine costs.
“This increase (in operating losses) was primarily driven by elevated medical utilization across the insurance services division products, as well as increased pharmacy costs that exceeded revenue rate increases, including those associated with Glucagon-like peptide-1 drugs,” the report stated.
The red ink may have run even redder were it not for a $270 million cash infusion from the Federal Emergency Management Agency to reimburse COVID-19 related expenses.
However, the report also mentioned that patient volume increased for 2024, with total inpatient activity increasing 4% over 2023 and outpatient revenue per workday increasing by 13%.
“During 2023, people were still somewhat reluctant to seek elective health care post-COVID. Meanwhile, like most other health systems, there were clinical staffing/workforce challenges post-COVID,” said a UPMC spokesperson. “During 2024, people increasingly sought elective care again and we were able to work on our staff recruiting/retention and increase access.”
On a year-to-year basis, total revenues for UPMC rose to $29.87 billion in 2024, from $27.7 billion the year prior. However, these gains were offset by rising expenses, from $27.9 billion in 2023 to $30.01 billion in 2024.
“Health services” represents UPMC’s health network, which consists of 40 hospitals and numerous smaller outpatient facilities and offices. The majority of these facilities are in the Pittsburgh area, including the UPMC Passavant hospital in Cranberry Township.
