PHILADELPHIA-Patient admissions at University of Pennsylvania Health System, Philadelphia, surged 6% for the six months ended Dec. 31, 1998, compared with the year-ago period. But the flood of patients still fell short of putting the four-hospital system in the black.
For the same six months, UPHS reported a $33 million operating loss, compared with a $53 million operating loss in the year-ago period, according to Moody's Investor Service, New York, which downgraded $828 million in UPHS debt to A2 from A1 March 22.
"Moody's is so down on Philadelphia because of their experience with Allegheny (Health, Education and Research Foundation) that there's no telling what they'll do to anybody," William Kelley, M.D., chief executive officer of UPHS, said last week. Nevertheless, Kelley is upbeat about a financial turnaround at UPHS because patient volume is accelerating.
"We've had this spectacular increase in activity. Admissions (fiscal) year-to-date are up 7%, and outpatient visits are up nearly 10%," he said. "That's quite a big increase in a system with 2.5 million outpatient visits and 80,000 admissions."
The uptick in patient volume is largely due to new physicians at UPHS, primarily those recruited from the eight Philadelphia-area hospitals included in AHERF's bankruptcy in July 1998, Moody's said.
Despite the increased patient volume, however, managed-care pressures continue to squeeze financial margins and helped cut the system's unrestricted cash and investments to $555 million from $723 million during the six months ended Dec. 31, 1998. On a positive note, operating cash flow for the same period rose to $41 million from $16 million, equal to a 5% margin, Moody's noted.