UPMC’s operating revenue continued to grow in the past fiscal year as the region’s largest health system relied less on Highmark insurance customers.

In a media briefing Thursday at its Downtown corporate headquarters, UPMC CFO Robert DeMichiei said operating revenue for the fiscal year exceeded $12 billion for the first time ever, up from $11.4 billion the year before.

The audited fiscal 2015 financial results showed the largest payer for UPMC in the year ending June 30 was Medicare, accounting for 35 percent of net patient service revenue, followed by Highmark at 26 percent, combined national insurers such as Cigna, Aetna and United Healthcare at 13 percent, and medical assistance at 10 percent.

The Highmark number represents a 5 percentage point drop from a year earlier, with that revenue spread fairly evenly among the other payers in fiscal 2015. A commercial contract that had allowed many Highmark insurance customers in-network access to UPMC hospitals and doctors expired on Dec. 31, the midpoint of UPMC’s fiscal year.

“Our mix of payers is changing,” Mr. DeMichiei said. He expects that trend to continue.

“You’re going to continue to see the Highmark share shrink, although not go away,” he said.

Mr. DeMichiei expects to see growth particularly among the Medicare and medical assistance programs, as well as insurance plans offered through the federal marketplace exchange. The audited report shows that Medicare and medical assistance have represented about three-fourths of UPMC’s total enrollment revenue the past two years.

“Health care is moving toward a government pay model,” Mr. DeMichiei said, adding at another point that “the question is who can survive in that reimbursement model?”

For its part, Mr. DeMichiei said UPMC is aggressively going after marketplace members, noting that it offers “the second lowest priced silver plan in the U.S.”

UPMC’s own health plan gained an additional 400,000 members over the past fiscal year, with membership as of June 30 totaling 2.73 million. The UPMC report stated that its health plan membership has grown 67 percent since 2011, with across-the-board market share gains in every segment.

Just over 1,000 employees took a voluntary buyout, “slightly above our expectations,” Mr. DeMichiei said, and UPMC employment stands at around 60,000 workers.

He said the job cuts followed a steady decline in inpatient care, a national trend as more treatments move to outpatient and other settings. Annual admissions and medical observations in the UPMC system dipped less than 1 percent to 284,839, the first year without growth at least since 2012.

“I would believe that it’s a combination of more outpatient, less inpatient and probably some dislocation [of patients] from the divorce” with Highmark, said Stephen Foreman, an associate professor of economics and health administration at Robert Morris University.

Downtown-based Highmark declined to discuss the UPMC figures.

Mr. Foreman said a 4 percent increase in physician revenue at UPMC “suggests to me that they’ve managed to hold on to their patients.” Hospital services and other care contributed more than $7.8 billion in operating revenue — up from about $7.5 billion the prior year — and more than half the health system’s operating income.

The increase emerged even as UPMC decreased its beds in service from 4,805 to 4,446, largely for efficiency, Mr. DeMichiei said. He said population trends in Western Pennsylvania are continuing to slip.

Even so, Mr. Foreman said the results at UPMC appear to bode well.

“For all of the turmoil that we’ve had here over the last year, the stability that this provides — that’s encouraging, I think, for UPMC and for the community,” he said.

Steve Twedt: stwedt@post-gazette.com or 412-263-1963; Adam Smeltz: asmeltz@post-gazette.com or 412-263-2625.

First Published: August 28, 2015, 4:00 a.m.