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October 01, 2014 12:00 AM

University of Pennsylvania Health System posts robust 2014 financials

Bob Herman
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    University of Pennsylvania Health System, Philadelphia, one of the largest academic medical centers in the country, recorded massive gains in its revenue and surpluses last year, while keeping expenses in check.

    In fiscal 2013, ended June 30, the health system's operating margin hit 5.3%. But in fiscal 2014, the operating margin jumped to 7.4%, according to audited financial statements.

    The jump was largely attributable to a lower growth rate in expenses. UPHS said revenue increased 12.5% to $3.9 billion in 2014, while expenses rose at a lower 10% rate. Its malpractice insurance costs actually decreased year-over-year, a trend seen nationwide as more providers consolidate. That led to a $291.4 million operating surplus in 2014, a 57% jump from the $185.1 million operating surplus in 2013.

    Including investment income, the system's total surplus soared 48% to $438.6 million.

    UPHS also disclosed details of its transaction with 220-bed Chester (Pa.) County Hospital. In January 2013, Chester County Hospital signed a nonbinding letter of intent to join UPHS. That deal went into effect Sept. 1, 2013. Under terms of the deal, UPHS acquired Chester County Hospital's $275 million in assets and assumed the hospital's $119 million debt load. The addition of Chester County Hospital was one reason UPHS' revenue and expenses increased year-over-year.

    UPHS has not yet released patient utilization statistics. But the system did break down revenue by payer source, revealing that 40% of its net patient-service revenue came from Medicare and Medicaid. Those figures are much lower than UPHS' in-town competitor, Temple University Health System, which is the area's largest safety net provider.

    Three high-profile hospitals anchor the academic medical center: 784-bed Hospital of the University of Pennsylvania, 455-bed Pennsylvania Hospital, and 331-bed Penn Presbyterian Medical Center.

    Follow Bob Herman on Twitter: @MHbherman

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        • Midwest
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    • Blogs
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      • HIMSS 2023
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      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • 40 Under 40
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - AI and Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Sponsored Video Series - One on One
      • Sponsored Video Series - Checking In with Dan Peres
    • Data & Insights
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      • Hospital Financials
      • Staffing & Compensation
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