University Times

Driven by growing patient volumes, higher insurance services membership and a strong investment portfolio, UPMC reported a 15 percent gain in total revenue, to a record $3.3 billion, for the six months ending Dec. 31. Excess margin — or margin from operations and investment activity — rose 52 percent to $342 million.

UPMC added the equivalent of more than 600 full-time positions in the six-month period, including nearly 150 physicians.

Operating revenue grew by $269 million to $3.02 billion. At the same time, increased expenses to support future growth resulted in a $38 million decrease in operating margin, to $124 million.

Increased support for the academic mission and investments in the expansion of safety-enhancing electronic medical records in UPMC’s physician practices also contributed to the increased operating expenses.

Medical-surgical admissions to UPMC’s hospitals rose 3 percent for the six months compared with the year-ago period, while outpatient activity rose 13 percent.

Capital expenditures increased by $94 million to $231 million. Major projects include ongoing construction of Children’s Hospital, a research complex in Lawrenceville and a research facility at Magee-Womens Hospital.

UPMC’s net investing activity for the six months rose to $220 million from $73 million in the year-ago period. The gain reflected a 9.8 percent return on UPMC’s investment portfolio and a change in the classification of certain investments. As a result, both realized and unrealized gains and losses are reflected in the consolidated statement of operations. Previously, the changes in the fair value of these investments were recorded only on the balance sheet. UPMC’s “Unaudited Quarterly Disclosure Statement” for the period ending Dec. 31, 2006, is online at: http://www.upmc.com/Communications/NewsBureau/NewsReleaseArchives/2007/February/UPMCReportsHigherRevenue.htm.