Nonprofit healthcare systems are adding or expanding facilities in an effort to keep up with patients’ growing demands, despite a challenging operating environment.
At the University of Pittsburgh Medical Center, construction continues on a 17-story UPMC Presbyterian inpatient tower, a $1.5 billion project at the system’s Oakland hospital campus that will house 636 beds. The tower, on track to open in 2026, will offer specialty care such as cardiology and neurology, according to UPMC.
Related: 5 takeaways from health systems’ Q2 earnings reports
UPMC opened Western Behavioral Health at Twin Lakes in Somerset, Pennsylvania, in June, part of a $16 million expansion project, and in April, opened the $510 million Mercy Pavilion in Pittsburgh to house vision and rehabilitation services.
UPMC spent about $346 million on capital projects in the year’s first half, according to its second-quarter earnings report released Thursday. In 2022, it spent $994 million on such projects.
Amid the big investments, UPMC is working to recover from recent financial challenges. In the second quarter, the system reported a $41.3 million net loss, an improvement from the $623.1 million loss in 2022’s comparable quarter. Operating losses totaled $85.84 million and expenses rose 10.5%.
Second-quarter revenue rose 8.6% to $6.95 billion, including a 7.1% increase in patient service revenue. Admissions grew by 3% in the first half of the year.
Earlier this summer, UPMC and Washington, Pennsylvania-based Washington Health System signed a letter of intent to merge, a document that is not legally binding but serves as a precursor to a definitive agreement.
Ohio-based Cleveland Clinic, which reported more than $21 million in operating losses in the second quarter, is also investing in expansion. In July, it opened the Cleveland Clinic Mentor Hospital, which houses 34 inpatient beds in Mentor, Ohio. The system plans to open a 1 million-square-foot Neurological Institute building at its main campus in late 2026 and wrap up a 150,000-square-foot expansion at its Cole Eye Institute in 2025.
Cleveland Clinic is also a key investor in an innovation district in Cleveland that will combine expertise from local health systems and universities and include the Global Pathogen Research Center.
On Wednesday, Cleveland Clinic reported net income of $145.23 million for the second quarter, up from a $786.93 million loss in the year-ago period. Revenue jumped 14.9% to $3.6 billion, while expenses rose 9.3% to $3.41 billion.
For the first six months of the year, inpatient admissions grew 9.8% and surgeries increased 10.8%.
