big numbers

© 2016 UPMC SYS503024 LGH/JT 1216 Form No. UPMC-1775
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Do the math.
community, look at the bottom line.
status and our contributions to the
When you think about UPMC’s nonprofit
like revenue from a for-profit company.
doesn’t go into shareholders’ pockets,
plowed right back into our services. It
which means money that we earn is
communities. Yes, UPMC is nonprofit,
to take care of the people in our
and maintain the facilities and services
comes big expenses — all to provide
That is true, but with our big company
it looks like we earn a lot of money.
UPMC is a large organization, and
UPMC is a $13 billion
integrated global health enterprise
with
big numbers:
•• Ranked 12
nationally, #1 in Pittsburgh
by U.S. News & World Report
th
•• More than 25 hospitals and
600 locations
•• 3 million UPMC Health Plan members
On any given day, UPMC
Treats 3,500 patients in our hospitals
Delivers 40 babies
Cares for 2,000 patients in
our emergency departments
Has more than 10,500
outpatient visits
Provides housing and care for more than
2,300 seniors
Performs 500 surgeries,
415 MRIs, and 1,400 CTs
Provides jobs for more than
65,000 people as the largest
nongovernmental employer
in the state
All of these numbers mean that UPMC generates a lot of revenue,
which has some people questioning: Since UPMC is a nonprofit,
where does the money go?
?
Here’s the math:
operating revenue
12.8Billion
$
Where do we spend this money?
the money we are
paid to provide care
operating expense
– $12.5 Billion
what it takes to
provide services
to our patients and
the community
36¢
4¢
Salaries &
benefits
Depreciation
expense
20¢
Medical
supplies
33¢
7¢
Health plan member
claim payments to other
health care providers
Charity care &
community benefits
That leaves
310 Million of
operating income
$
depreciation expense
+ $457Million
Gives us
767Million
$
EBIDA Fiscal
Year 2014
Operating Income is a measurement of the
accounting profit of UPMC; it is used as an
indicator of efficiency in operations.
And we add back depreciation expense, which
is an expense related to the cost of construction
projects and equipment purchased in prior years.
We benefit from these expenditures for many
years, so the expense is spread over a longer
period of time and into future years. However,
no current year cash is related to this expense.
What is EBIDA?
A fancy acronym for Earnings Before Interest,
Depreciation, and Amortization, which is an
accounting term that is an approximate measure
of a company’s operating cash flow — or how
much money it has on hand to reinvest in its
core business.
In fiscal year 2014, we used
– $115Million
How did we reinvest this money?
71%
interest expense
Facilities & equipment
then we invested
– $384Million
in good science,
smart technologies,
and accountable care
to serve our patients
29%
IT & electronic
health record
That leaves us
268Million
$
that’s less than
2 1/2 cents for
every $1 in revenue
AA–
An amount we need to keep our strong rating,
which demonstrates our credit worthiness.
So, where does the money go?
Right back to care for
our patients, members,
and the communities
we serve.