How UPMC Achieved $12 Billion in Revenue: Integrating Digital Health, Insurance, and Innovation

The internet has triggered a wave of minor disruptions across various industries. However, the healthcare sector has been particularly “singled out.” Since the emergence of the concept of “Internet Healthcare,” controversy surrounding it has never ceased. Within the healthcare system, hospitals may feel the impact most acutely. As this sector is often regarded as the “deep-water zone” of reform—where changes are profound and complex—the choice between going with the flow or charting an independent course is one in which overseas hospitals, with their extensive experience, are best positioned to weigh in. VCBeat has selected and systematically reviewed hospitals listed on the “2015–2016 Best Hospitals in America” ranking, aiming to help practitioners across China’s healthcare industry chain understand how overseas hospitals leverage the internet and build their business models. This article will analyze how the University of Pittsburgh Medical Center (UPMC) leverages “Internet Plus.”

UPMC’s predecessor, Louise Lyle Hospital, was founded in 1893 and merged with the University of Pittsburgh in 1927. In 1961, UPMC transitioned from a community hospital to an academic medical center. Currently, it operates 20 academic, community, and specialty hospitals and more than 500 clinics, covering all regions of Pennsylvania. The system employs over 60,000 staff members, including more than 3,600 physicians, and serves over 3.9 million outpatient visits and more than 710,000 emergency department visits annually.

It has been ranked among the “Best Hospitals in America” by U.S. News & World Report for 16 consecutive years. This achievement is attributable to its research accomplishments in multiple fields, including organ transplantation, cancer research, and neurosurgery, with particular prominence in organ transplantation. It has performed numerous world-first transplant procedures involving various organs, including the first combined heart-liver transplant, and currently operates the largest organ transplantation research center in the world.

When confronting the emerging field of digital health, UPMC, with its profound medical background, did not remain a mere observer but instead became an active participant and pioneer. Since 2006, UPMC has invested heavily in the digital health sector, aiming to identify its core competencies in the era of digital medicine. The results thus far have been remarkable, which can be summarized in two words:"Efficiency"+“Prevention”。

Efficient Hospital Management Experience — VCBeat
How can a hospital with a vast organization, numerous employees, and an enormous patient volume achieve efficient management, help patients quickly find the appropriate medical personnel, and rapidly process the vast amount of medical information? UPMC’s answer isEstablish a portal website and implement electronic medical records to connect hospitals with each other and with patients.。

▼Portal Website
The websites under its umbrella have been broadly categorized into three types based on their functions:

I. Official Website
In addition to serving as a platform for introducing the hospital and as a portal linking its various affiliated websites, UPMC’s official website offers the following four functions: 1. It provides a search engine to help patients quickly find suitable doctors within UPMC. 2. It offers online appointment scheduling to facilitate rapid booking. 3. It provides disease information to enhance public understanding of specific conditions. 4. It establishes an electronic library for physicians and patients to access and learn medical knowledge, and offers various tools to assist patients in performing preliminary self-assessments.

▲For example, the due date calculator provided by the UPMC official website’s e-library can help ordinary couples quickly estimate their expected delivery date.

II. Patient Portal
MyUPMC is a patient portal developed by UPMC for its patients. General patients can use MyUPMC to access a variety of features, including:

o Get Doctor's Advice
o Query medical records and test results
o Obtain Prescription
o Book a Doctor
o Chronic Disease Tracking and Monitoring
o Manage family members' medical information after obtaining proxy authorization
o Print various treatment guidelines published by UPMC
o Access 24/7 services through UPMC’s telehealth program, UPMC AnywhereCare
o Pay bills, etc.

III. Related Websites
In addition to medical institutions, UPMC also operates several entities that do not directly engage in disease treatment, such as the health insurance company UPMC Health Plan and the high-tech R&D collaboration arm UPMC Enterprises. These non-medical entities each maintain their own websites to serve customers and liaise with business partners. Among these affiliated websites, blog-style sites
www.upmcmyhealthmatters.comHighly distinctive. All bloggers on this website are professional physicians who publish daily health updates covering a wide range of topics, from healthy recipes to blood glucose control methods. The aim is to help people cultivate healthy lifestyle habits and prevent the onset of diseases.

▼ Electronic Medical Record
As a critical document that records nearly all of a patient’s medical information, the digitization of medical records is of paramount importance. UPMC has long recognized this.

As early as 2006, UPMC began piloting electronic health records (EHRs) at its UPMC Shadyside Hospital. In 2009, with the enactment of the Health Information Technology for Economic and Clinical Health (HITECH) Act, UPMC accelerated the network integration of its hospitals. After three years of development, by early 2012, all UPMC hospitals had adopted EHR systems.

Currently, UPMC has implemented an integrated electronic health record (EHR) system that covers all medical specialties. This means that whenever a patient receives care at any hospital or clinic under the UPMC network, all of their medical information—such as test results, previous physician orders, and medical imaging—is recorded in their electronic health record. As a result, patients no longer need to handle paper-based medical records. Furthermore, since this EHR is shared across all UPMC-affiliated institutions, patients are spared the inconvenience and embarrassment of bringing incorrect or incomplete records when visiting different departments or hospitals.

Of course, these benefits are attributable to UPMC’s relentless efforts in the digitalization of medical information. Between 2009 and 2014 alone, it invested $1.5 billion over this five-year period. To further enhance the performance of its electronic health record system, UPMC has planned an additional investment of $100 million.

Developing an App Requires “Becoming the User”
In terms of app utilization, UPMC has gone to great lengths, a commitment that is vividly demonstrated in its development of the EMS Navigator app.

EMS Navigator is a professional medical application designed to assist emergency medical technicians (EMTs). During the initial development phase, the UPMC Technology R&D Center conducted in-depth consultations with personnel at various UPMC emergency centers to identify their functional requirements for supportive applications. The team also gained hands-on experience with popular emergency response apps available on the market, analyzing their strengths and weaknesses. This process culminated in the design of EMS Navigator, an intuitive and user-friendly app that comprehensively addresses all the needs of emergency medical technicians.

Feedback from staff indicates that this app has indeed improved the work efficiency of emergency responders, buying valuable time for patients. This is precisely why its downloads surpassed 800 shortly after its launch.

 ▲ EMS Navigator User Interface

To date, in addition to developing corresponding mobile apps for its own digital platforms such as its official website and MyUPMC, UPMC has launched only four specialized medical apps, including EMS Navigator. Each of these apps is a high-quality product, with their excellence stemming from UPMC’s development philosophy of “becoming the user.”

Telemedicine: Making Healthcare Accessible Everywhere
To date, UPMC’s telemedicine platform has evolved from a videoconferencing system that provided remote psychological counseling to inmates 13 years ago into a comprehensive super-platform integrating audio-video transmission, medical imaging transfer, and remote patient monitoring at home. Recently, UPMC has partnered with Alcatel-Lucent to begin developing the next generation of its telemedicine platform.

Leveraging its robust telemedicine platform, UPMC is now capable of delivering well-established telehealth services to both individuals and healthcare institutions. The focus of UPMC’s offerings varies depending on the target population served.

▼For Individuals
The ultimate goal of the digital health era is to provide medical services to patients anytime and anywhere. UPMC has named its direct-to-consumer telemedicine service “UPMC AnywhereCare,” a moniker that clearly conveys its intent: delivering the University of Pittsburgh Medical Center’s care wherever it is needed.

Patients enrolled in the UPMC AnywhereCare program can receive remote diagnostic and treatment services from UPMC healthcare providers anytime and anywhere, provided they have access to a device capable of video calls, such as a computer or smartphone. However, due to technological limitations, the conditions treatable through UPMC AnywhereCare are mostly common minor ailments, such as colds and headaches. Given that children often cannot accurately describe their symptoms, UPMC offers AnywhereCare services only to children aged three and older. Furthermore, the range of treatable conditions for this pediatric population is significantly reduced from the 33 conditions covered for adults to just five.

Furthermore, due to legal restrictions, UPMC AnywhereCare services are only available to individuals located in Pennsylvania or Maryland. If patients are located elsewhere, we regret that UPMC cannot provide them with UPMC AnywhereCare services.

▼For Healthcare Institutions

UPMC’s Telemedicine Program for healthcare institutions delivers UPMC’s high-quality medical services to locations around the world. Healthcare organizations of all types, regardless of their distance from UPMC, can partner with UPMC to participate in the UPMC Telemedicine Program. Patients receiving care at participating hospitals can access remote consultations and treatment from UPMC specialists in more than 15 clinical areas, including surgical care, stroke management, and diabetes care.

Despite not being able to provide patients with medical services anytime and anywhere like UPMC AnywhereCare, the advantages are still numerous. Patients can receive high-quality medical services from UPMC in a timely manner without having to travel far from their place of residence, while healthcare institutions participating in the program can also receive professional guidance, improve work efficiency, and reduce operational costs.

▼ Teaching and Research
From UPMC’s perspective, leveraging telemedicine platforms for physician education and training is far from an underutilization of resources. This approach not only helps enhance medical capabilities in remote areas, enabling more people to access high-quality healthcare services, but also serves as a practical test of the upgraded telemedicine platform’s performance.

As evident from the preceding discussion, there remains substantial scope for research and development in the current field of telemedicine. It is therefore logical that UPMC has leveraged its own telemedicine platform to develop remote treatment modalities for a variety of diseases.UPMC is currently researching the application of telemedicine in the prevention and control of chronic diseases.

Secrets to Making Money in the Modern Era
UPMC has always taken it as its mission to establish an outstanding non-profit healthcare institution. According to UPMC’s financial reports, its total revenue for fiscal year 2015 was $12 billion, while its EBITDA (earnings before interest, taxes, depreciation, and amortization) amounted to only $804 million. Given UPMC’s substantial operating costs and its annual $400 million investment in research, the slim profits derived solely from patient care are clearly insufficient to sustain the hospital system’s rapid development. So, through what channels does UPMC secure the funding needed for its growth?

1. Accept social donations.Each year, UPMC holds events to raise funds for research projects, such as the one scheduled for March 30 this year in observance of National Doctors’ Day.

2. Established the health insurance company UPMC Health Plan.Leveraging UPMC’s deep understanding of patient needs, UPMC Health Plan has seen continuous growth in its membership and premium revenue since its inception. In 2015, its membership surpassed 2.7 million, with premium revenue exceeding $5.3 billion. UPMC allocates a portion of the insurer’s profits to corporate development and another portion to investments. For example, in 2011, it invested $24 million to co-establish a healthcare consulting firm with The Advisory Board Company. Evolent HealthLeveraging UPMC’s professional expertise, the company focuses on helping people prevent diseases and improving corporate productivity. It successfully went public just four years after its establishment, multiplying UPMC’s initial investment several times over and reaching a market capitalization of $250 million.

3. Launched the incubator UPMC Enterprises.UPMC has always prioritized the development of advanced medical technologies, leading to the establishment of UPMC Enterprises, which is dedicated to investing in outstanding research and development (R&D) projects. Among the various R&D initiatives funded by UPMC, medical big data research stands out as particularly noteworthy. It is widely acknowledged that the era of digital medicine coincides with the era of personalized medicine. The big data research project in which UPMC participates aims to analyze information collected from various devices, such as remote health monitoring systems and smartphones. By examining patients with the same disease on an individual basis—considering factors including lifestyle, dietary habits, and mental health—the project seeks to identify similarities and differences among this patient population. The ultimate goal is to develop personalized treatment plans and disease prevention strategies.

The renowned ancient physician Bian Que once remarked that his elder brother’s medical skills were far superior to his own, as his brother could eliminate diseases before they manifested any visible symptoms. In modern terms, this means that physicians who excel in disease prevention are truly the most skilled. Therefore, it can be argued that “prevention” is the central theme of the advanced stage of medical development. Meanwhile, given that computers are synonymous with speed and accuracy, it is entirely reasonable to regard “efficiency” as the core theme of information technology development. As a product of the integration of modern medicine and information technology, digital healthcare inevitably revolves around these two themes: “prevention” and “efficiency.” UPMC’s strategic decision to position “prevention” and “efficiency” as its core competencies demonstrates remarkably accurate insight. Its strong growth trajectory in this field further underscores the value of this approach.

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By | Zi Junwei