UPMC sees growth in insurance usage during first 6 months of the year

More people are using UPMC’s insurance options, particularly in Eastern Pennsylvania.

The Pittsburgh-based health care giant reported an 11% increase in insurance enrollment, bringing membership to about 4.5 million during the first half of 2023.

UPMC attributed the growth to its expansion of behavioral health and Medicaid products into the eastern part of the state.

But that growth took a bite out of profits.

Operating income fell during the six months ended June 30 compared to the prior year as more people tapped insurance products, UPMC said in its quarterly financial report.

Operating income clocked in at $15 million in the first half of the year, down from $82 million last year. Revenues rose to $13.8 billion, up from $12.5 billion a year ago.

UPMC is the second-largest, provider-owned health plan nationally. Its individual market product on Pennie, Pennsylvania’s state-based exchange, offers coverage to more than 98,000 members, and added over 21,900 during the first half of the year. Overall, insurance services operating income for the six months declined by $74 million compared to the same period last year as a result of higher usage.

In June, UPMC Western Behavioral Health at Twin Lakes in Somerset opened to increase access to substance abuse disorder treatment.

The $16 million expansion project includes a 19,300-square-foot building and renovation of the existing facility. It will increase the number of beds by 60% and create new jobs in the region, UPMC said.

Hospital patient admissions and observations grew 2%, and outpatient activity grew 9% during the first six months of the year.

“With patient preference shifting from inpatient to outpatient care delivery closer to home, we continue to substantially invest to improve access to UPMC’s clinical excellence and community services in ambulatory settings throughout all our regions,” said Edward Karlovich, executive vice president and chief financial officer of UPMC.

“UPMC’s $363 million in capital expenditures for the year’s first six months are aimed at supporting the right level of patient-centered, high-quality, cost-effective care in the right places,” Karlovich said.

Capital projects include major construction and improvements at UPMC facilities in Central and North Central Pennsylvania, the new UPMC Mercy Pavilion, UPMC Presbyterian, and expansions and enhancements across the health system.