UPMC plans $900M capital budget next year
UPMC is planning a $900 million capital budget for 2018, which includes a $750 million tax-exempt bond issue.
The projects include a 90-bed hospital in South Fayette, Pennsylvania, which will get $35 million from the bond issue. The health system budgeted $400 million of the bond for construction.
Other bond money will be used to pay off debts, including refunding $45 million in bonds held by Hanover Hospital and covering a $235 million bridge loan to PinnacleHealth System.
The capital budget will help UPMC plans to expand its footprint in the Keystone State. The health system recently came to a definitive agreement with PinnacleHealth, a Harrisburg-based system.
The PinnacleHealth deal, which is UPMC’s largest ever and the first to involve an entire health system, will expand UPMC’s market share in central Pennsylvania. The deal will include four central Pennsylvania hospitals, including Lancaster Regional Medical Center and Heart of Lancaster Regional Medical Center, that PinnacleHealth bought from Community Health Systems in July.
Also this year, UPMC signed a definitive agreement to buy Quorum Health’s 70-bed Sunbury Community Hospital and 47-bed Lock Haven Hospital.
While the Pittsburgh-based health system is looking to expand into Central Pennsylvania, it already has 41% of the inpatient medical-surgical market in western Pennsylvania, including 58% in Allegheny County.
In May, UPMC reported its operating revenues grew to $11 billion with a net income of $871 million during the first nine months of the fiscal year. While other facilities have seen lower admissions and visits, UPMC’s facility admissions and observations increased by 9%. The company's Insurance Services Division also grew by 7% to 3.2 million members. UPMC hopes by expanding further into central Pennsylvania that its insurance division will also expand membership.
- Pittsburgh Post-Gazette UPMC plans $900 million in capital projects in 2018
- Becker's Hospital Review UPMC to spend $900M on capital projects in 2018