Health care giant UPMC reported Tuesday that it had nearly $200 million in profits during the first nine months of this year — about a quarter of what it reported during the same span a year ago.
UPMC said in its third-quarter financial report that labor and supply markets related to the pandemic resulted in increased costs.
UPMC reported a profit of $196 million during the first three quarters of this year, down from $800 million during the first three quarters of 2021.
Edward Karlovich, UPMC’s executive vice president and chief financial officer, blamed the drop largely on increased labor costs because of employee shortages.
“We expect to see the pandemic’s lingering effects on health care, including higher costs to effectively address staffing, labor and supply-chain challenges, and other operational expenses,” Karlovich said in a statement.
Karlovich said UPMC hopes to address rising costs associated with labor shortages with a newly announced student loan forgiveness plan for nursing students and additional incentives to bolster the pipeline of students to become UPMC health care workers.
Covid relief funding also decreased this year compared to last year, and investment losses have been significant, according to UPMC.
Investment losses have been common across the country due to a bearish stock market, and UPMC has not been immune to those trends. In the first nine months of this year, UPMC reported more than $1.2 billion in losses from investing and financial services.
This year has also included increased capital investments for UPMC, including the start of construction on a $1.5 billion hospital tower in Oakland. UPMC said it had $701 million in capital expenditures during the first nine months of this year, up from $552 million during the first nine months of 2021.
The Pittsburgh-based UPMC operates 40 hospitals across the Mid-Atlantic and employs 92,000 people. It also operates a health insurance company, and other health care subsidiaries.
