The University of Pennsylvania Health System reported full-year operating profit of $238 million

The University of Pennsylvania Health System this week reported $238 million in operating income for the fiscal year that ended June 30, reflecting a 61% increase from the year before, thanks in part to stabilizing wage inflation and increasing patient volumes.

The not-for-profit system’s operating margin of 2.4% remained well below pre-pandemic levels of more than 5%, as the rising costs of providing care have outpaced increases in revenue.

Penn’s revenue in fiscal 2023 reached nearly $10 billion, up 8% from $9.2 billion the year before. Penn owns six hospitals, including three in Philadelphia.

Like other health systems, Penn has experienced the pressure of higher operating costs. Penn had 235 days of cash on hand on June 30, 2019. That figure — which measures how long an organization could keep operating if it brought in no more revenue — declined to 191 days at the end of June 2023.

Even as more care shifts to outpatient settings, Penn’s inpatient traffic last year topped 137,000 admissions, surpassing the system’s pre-pandemic high of 135,277 in 2019. That happened despite a 14% decline in inpatient surgeries over the same period, 41,434. Outpatient surgeries were up 19%, to 87,679.

In Philadelphia, Penn owns the Hospital of the University of Pennsylvania, Penn Presbyterian Medical Center, and Pennsylvania Hospital. Its reach outside of the city includes Chester County Hospital in West Chester, Lancaster General Hospital in Lancaster, and Princeton Medical Center in Plainsboro, N.J.

Two single-hospital organizations in Bucks County also reported fiscal 2023 financial results this week.

Grand View Health, in Sellersville, reported a $49 million operating loss on $247 million in revenue.

Its results show the impact of rising labor costs. For fiscal 2023, Grand View budgeted $147 million for salaries and benefits. The actual figure was $160 million. The amount budgeted for purchased services, which includes contract labor, was $55 million. It turned out to be $69 million.

Doylestown Health had a $19 million operating loss in fiscal 2023, compared to a loss of $37 million the year before. Doylestown’s revenue fell to $418 million from $432 million.