HERSHEY, Pa. — Penn State Health has achieved strong financial results for the first half of fiscal year 2025, reporting operating income of $50.7 million and an operating margin of 2.3%. These results surpassed the health system’s financial plan and highlight its commitment to financial strength and operational efficiency, according to Paula Tinch, executive vice president of finance and chief financial officer for Penn State Health.
A key driver of these improved results was positive income in the second fiscal quarter against a projected loss for the period. The health system’s operating income improvement comes even as it incurred initial expenses related to its planned transition to the Epic electronic medical record (EMR) system, a strategic investment in patient care and efficiency.
“We are pleased with our financial performance in the first half of the fiscal year, which reflects our focus on cost discipline, strategic growth and preparing for the future,” Tinch said. “We remain committed to delivering high-quality care while maintaining financial sustainability.”
Other key financial and operational highlights include the following:
- Improved liquidity: Days Cash on Hand (DCOH) rose to 109 days at the end of December, up from 106 at the close of the first quarter.
- Strong patient volumes: Inpatient discharges and total surgical cases also exceeded plan, while emergency department visits and outpatient clinic visits were slightly below budget.
- Community hospital growth: Milton S. Hershey Medical Center, Hampden Medical Center and Holy Spirit Medical Center all contributed to higher-than-expected revenue. Lancaster Medical Center also showed strong progress, driven by increased patient volumes.
- Behavioral health services: Pennsylvania Psychiatric Institute’s average daily census in December was approximately 23% higher than the prior year.
- Effective expense management: While supply and pharmaceutical costs were higher due to increased patient volumes, Penn State Health is successfully reducing reliance on contract staffing. The recent hiring of more than 15 certified registered nurse anesthetists (CRNAs) will help eliminate the need for outsourced labor in West Shore clinics.
"Our growth is a testament to the dedication of our teams and their commitment to our mission of improving the health of people across Pennsylvania," said Deborah Addo, interim chief executive officer, president and chief operating officer for Penn State Health. "We deeply appreciate the trust our communities place in us."
Penn State Health will continue to focus on strengthening its financial position, enhancing patient care and strategically investing in its workforce and infrastructure to ensure long-term success.