UPMC operating margin shrinks in Q1

Pittsburgh-based UPMC reported higher revenues in the first quarter of its 2017 fiscal year, but the system ended the period with lower operating income than in the first quarter of FY 2016.

UPMC recorded revenues of $3.4 billion in the first quarter of FY 2017, up 9.1 percent from revenues of $3.1 billion in the same period of the year prior, according to recently released bondholder documents

The revenue boost was attributable to growth in UPMC's insurance division and higher patient volumes. UPMC said medical-surgical admissions and observation cases were up 5 percent in the first quarter of FY 2017 compared to the same period of the year prior. The system's health plan membership grew 7 percent year over year to more than 3 million members in the first quarter of FY 2017.

After accounting for a 9.7 percent year-over year-increase in expenses, UPMC ended the first quarter of FY 2017 with operating income of $60 million. That's down from operating income of $72 million in the same period of the year prior.

UPMC recorded an operating margin of 1.8 percent in the first quarter of FY 2017, compared to an operating margin of 2.3 percent in the same quarter of the year prior. 

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