In total, UPMC reported (PDF) a year-end operating surplus of $190 million on revenue of $11.4 billion, compared with a surplus of $132 million on revenue of $10.2 billion in fiscal 2013. Its operating margin increased to 1.7%, from 1.3%.
However, the 2013 results included UPMC's one-time cash donation to The Pittsburgh Promise, a charitable organization that helps the city's public high school students pursue higher education. Excluding that, UPMC's 2013 operating surplus would have been $187 million, for a 1.8% operating margin.
UPMC had wanted to let its contract with Highmark expire at the end of the year, but the insurer fought to keep UPMC in network. Under a June deal orchestrated by Gov. Tom Corbett, Highmark's patients will have access to UPMC's oncologists, behavioral-health and pediatric specialists, emergency departments and any doctors from whom they're currently seeking care for a particular condition.
Highmark members accounted for 19% of UPMC's revenue in 2014, down from 21% the previous fiscal year.
In its annual report, UPMC said as of Dec. 31, it had retained its 61% market share in Allegheny County, and had grown its market share in 10-county southwestern Pennsylvania to 42% from 41.1%. Its market share in 29-county western Pennsylvania also grew to 41.4% from 37.1%.
In the western part of the state in particular, admissions at its hospitals increased 8.3%, even though admissions were down 2.9% for all hospitals across the region.
The 2014 results include its 2013 acquisition of Altoona (Pa.) Regional Hospital, which contributed to the large year-over-year volume growth. Without Altoona, volume across the system would have declined 1.2%.
UPMC's own insurance division grew to 2.3 million members in fiscal 2014. Yet the group saw a decline in operating income after being squeezed by lower premiums, sequestration cuts and higher administrative expenses.
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