Penn Medicine reported its full-year earnings last week, revealing higher revenue and operating income than the previous year.
For the fiscal year ending June 30, Penn Med disclosed a revenue figure of nearly $10 billion — up 8% from 2022 — and a 61% higher operating income of $238 million. However, its operating margin of 2.4% remained below pre-COVID-19 levels, and its days of cash on hand declined to 191 days from 235 days in 2019.
Penn Med operates six hospitals and ten multispecialty centers. The number of patients visiting Penn hospitals has shown an upward trend, primarily due to a 19% increase in outpatient surgeries. In addition, despite conducting 14% fewer inpatient surgeries, there were nearly 2,000 more inpatients last year compared to the pre-pandemic high of 135,277.
After the pandemic, hospitals in Philadelphia struggled with upward pressure in operating costs associated with recruiting and retaining nurses and other staff members. Hospitals resorted to hiring short-term help, raising wages, and distributing more bonuses to address the labor shortage.
As a result, Penn Med reported a rare loss in operating income for the three months ending on March 31, 2022. After suffering a $42 million operating loss for the fiscal year 2022, it began recovering in 2023 to reach $160 million in operating profit for the first nine months of the 2023 fiscal year.
Penn Med has also recently made notable cost-cutting operational changes. Patrick Norton, its vice president for Public Affairs, wrote to the Philadelphia Inquirer that it would close its inpatient addiction treatment program at the Penn Presbyterian Medical Center in July. The closure is part of a multi-year plan to restructure Penn Med's mental health treatment centers.
In June, Penn Med also closed Penn Urgent Care South Philadelphia, citing patient needs and the rise of telemedicine.