UPMC Is Flipping 2024's Operating Losses Halfway Through The New Year

The University of Pennsylvania Medical Center (UPMC) is reversing last year’s losses, reporting $348.6 million in operating income (2.1% margin) for the first half of 2025, compared to a $313.3 million loss (-2.2%) during the same period in 2024. Both results included restructuring costs—$30 million this year and $87.8 million last year—as part of an ongoing systemwide overhaul.

The turnaround has been powered largely by UPMC’s healthcare delivery operations. Operating revenue in the division grew 10.5% year over year to $9.3 billion, reflecting stronger demand across the board: inpatient admissions and observation visits rose 7%, physician activity was up 7%, and outpatient activity—driven by surgical demand—jumped 15%. Expenses in the division climbed 7.1%, but workforce restructuring helped hold salary and benefit growth to 4.8%. The system also shortened its average patient stay from 7.1 to 6.2 days, easing pressure from higher volumes.

In the second quarter alone, UPMC notched a $111.2 million operating gain versus last year’s $210.3 million loss. Across the first half of 2025, total operating revenue reached $16.5 billion.

UPMC’s insurance services also contributed to the rebound, returning to profitability with operating revenue up 17.8% to $9.3 billion, outpacing a 13.4% expense increase. Gains were fueled by higher rates and revenues across Medicaid, Community HealthChoices, Community Care, and Medicare products, though membership grew only slightly. The insurer’s trailing 12-month medical expense ratio ticked up to 91% from 90.5% a year ago.

Altogether, UPMC recorded $476.2 million in excess revenue over expenses through June 30, boosted by $397.5 million in investment gains, and held 83 days of cash on hand. The system, which operates more than 40 hospitals and 800 clinical sites, remains one of the largest nonprofit health systems in the U.S. It had reported $29.9 billion in operating revenue for 2024 but ended the year with a $211 million operating loss, widened to $339 million after restructuring costs.