The University of Pennsylvania Health System reported $49.3 million in operating income for the first quarter of the 2025 fiscal year.
The health system reported its most recent operating income — which is down from $57.8 million reported in the corresponding period last year — to bondholders on Nov. 15, according to The Philadelphia Inquirer. The health system's total revenue increased to $2.83 billion, showing a growth of 10% from the $2.57 billion reported last year.
The increase in revenue can be attributed to strong performance in neurosurgery, cardiac surgery, and transplants, despite growth that was lower than expected in surgical areas such as GI and orthopedics, Chief Financial Officer Julia Puchtler told the Inquirer.
She provided an example of Penn performing 140 abdominal solid organ transplants — such as kidneys and livers – during the three months preceding Sept. 30, an increase from 129 in the same period the previous year.
Puchtler identified employee benefits and medical malpractice legal costs as key contributors to Penn’s expenses. Employee benefits costs rose by 11.5%, while salaries and wages increased by 7.2%. Additionally, medical malpractice expenses grew significantly, with the system’s quarterly costs climbing from $25 million to $35 million.
A temporary slowdown in patient volume at the Roberts Proton Therapy Center, caused by unplanned repairs, also impacted the system’s performance. While the repairs briefly reduced the number of patients treated at the center, it was able to return to full capacity last month, according to Puchtler.
The Roberts Proton Therapy Center facility, the largest center globally for both proton and conventional radiation, is a critical part of Penn’s cancer treatment infrastructure.
UPHS is facing a $183 million medical malpractice verdict, issued last year to a child born at the hospital in 2018 who suffered severe brain injuries at birth.
In September, The Daily Pennsylvanian reported on UPHS surpassing $10 billion in annual revenue for the 2024 fiscal year for the first time. The system's total revenue for the fiscal year was $10.9 billion, a 9.3% increase from $9.97 billion in the 2023 fiscal year.
In January, Penn Med signed a letter of intent for integration with Doylestown Health, which will add a seventh hospital to the health system.
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