Penn Medicine reported $163 million in operating profit in 9 months ended March 31

The University of Pennsylvania Health System reported $163 million in operating profit in the nine months that ended March 31, compared to $205 million in the same period last year, according to a notice to bondholders published Friday.

Last year’s results included two unusual items. They were a $129 million federal settlement involving a discount drug program and an extra $80 million reserve for future medical malpractice costs. Excluding those two items, this year’s results were comparable to last year’s, the nonprofit health system’s CFO Julia Puchtler said last week at a university board meeting.

Revenue: Penn’s revenue totaled $8.78 billion, up 8.8% from $8.07 billion last year. Even so, Puchtler noted in a presentation to the University of Pennsylvania board’s budget and finance committee that the overall number of patients were below management’s target by 1.5%.

The system had a shortfall of 1,200 surgery cases, though the number of inpatient surgeries still grew slightly, to 30,743 from 30,544. About half of the shortfall was in bariatric surgeries, Puchtler said, showing the continued impact of the GLP-1 weight-loss drugs throughout healthcare.

Expenses: Costs for supplies and services surged 16%, far outpacing revenue growth.

“This is driven largely by the growth in our pharmacy programs,” as well as gains in more complex services, Puchtler said. “So it’s in growing areas like oncology, CAR-T, bone marrow transplants, solid organ transplants. Those bring with them higher drug and device costs,” she said.

Notable: Doylestown Health, which Penn acquired April 1, also reported financial results for the first three quarters of fiscal 2025. What was likely the nonprofit’s final report as an independent system showed a $23.7 million operating loss, up from a $7.7 million operating loss last year.

Doylestown, which is Penn’s seventh hospital, had $340 million in revenue, up from $331 million in revenue in fiscal 2024.