MCCANDLESS TWP — COVID-19 didn’t affect UPMC’s finances in the first half of 2021, with the hospital network posting more than $12 billion in operating revenue from Jan. 1 to June 30.

In a media briefing Thursday, the hospital network boasted of its 9% revenue increase between the first halves of both 2020 and 2021, along with its $605 million operating income. UPMC’s operating margin including tax and interest expenses — the ratio of its income to revenue — jumped from 0.7% in the first six months of 2020 to 4.3% in the first half of 2021.

The Pittsburgh-based hospital and insurance network posted a total net income of $1.1 billion, including both operating and investment income. Its investment losses in the first half of 2020 were $423 million, but it more than made up for those losses thus far this year with investment income of $531 million.

In fact, the health system’s income not only increased over the COVID-19-laden 2020 financial figures, but also over the pre-pandemic 2019 calendar year financial results. Its $949 million earnings before interest, depreciation and amortization — or operating EBIDA — in the first six months of the year are more than double the $407 million operating EBIDA in the first six months of 2019.

Waylaid procedures

The largest jump in operating revenue came from the health system’s patient-facing side, highlighting the challenges it faced as a result of a March 2020 state directive to cease elective surgeries as well as patients’ reluctance to go to the doctor in the beginning of the pandemic.

UPMC noted its outpatient revenue increased 21% during the first halves of this and last year, and physician revenue jumped one-fifth. The hospital network’s raw number of admissions and observations increased by about 8% as well.

The volume of inpatients seen by UPMC, as noted in the company’s unaudited financial and operating report, has mostly returned to pre-pandemic levels. For the quarter ending June 2021, UPMC’s hospitals saw 90,318 medical-surgical admissions and observational visits, the highest that figure has been since the fourth quarter of 2019, when it saw 90,386 such visits.

In the quarter ending June 2020, for comparison, UPMC’s hospitals saw just 73,934 inpatient visits, a roughly 18% drop from the current figure and a 16% dip from the preceding quarter, ending March 2020.

Outpatient activity has fully rebounded, with UPMC’s outpatient revenue per workday actually having increased $1.5 million from the pre-pandemic numbers in the most recent quarter, jumping from $15.7 million in the quarter ending December 2019 to $17.3 million in the most recent three months.

The health system expects longer-term impacts from the pandemic, however.

“Although volumes have generally rebounded to pre-COVID-19 levels, UPMC and its subsidiaries have and expect to continue to experience some impact on operations as a result of the COVID-19 pandemic,” the June 2021 report states in part.

Improvements continue

A significant part of Thursday’s briefing focused on the expansions UPMC continues to make, particularly in its Passavant locations.

In the first six months of 2021, UPMC spent $374 million on capital expenditures, which include projects such as facility construction and clinical service expansions. UPMC CEO Leslie Davis said Thursday that the Passavant facilities have received a similar investment in the past 10 years, with $386 million invested to upgrade services and facilities within the decade.

In the past three years, she added, UPMC has invested $52 million in Passavant capital projects.

Edward Karlovich, executive vice president and chief financial officer, said that is simply part of what UPMC does as a community nonprofit.

“We are constantly reinvesting our earnings back into our employee and patient experience to support advanced care and services for every community we serve,” Karlovich said.

Specifically in UPMC Passavant-Cranberry and the nearby Lemieux Sports Complex, the health system has added or expanded women’s health, OB-GYN care, pediatric care including a walk-in urgent care and emergency department services.