Penn Medicine had a $189 million operating profit in the first half of fiscal 2026

The University of Pennsylvania Health System had an operating profit of $189 million in the first six months of fiscal 2026, up from $117 million in the same period a year ago, the nonprofit reported to bond investors Friday.

Operating income increased, even after Penn put $43 million put into reserves for medical malpractice claims. Two years ago, Penn had recorded charges totaling $90 million for the same purpose.

Here are more details on Penn’s results:

Revenue: Penn had $6.76 billion in total revenue, up nearly 12% even adjusting for the inclusion of Doylestown Health in fiscal 2026. Penn acquired Doylestown last April.

“We’ve had good volume growth over the prior year, particularly in our outpatient activity,” the health system’s chief financial officer, Julia Puchtler, said in an interview.

The system has also had an increase in the acuity level on the inpatient side, she said. That translated into more revenue.

Expenses: The $43 million malpractice charge boosted overall malpractice expenses through December to $125 million, from $69 million in the same period a year ago.

It’s not that Penn is seeing more claims, Puchtler said. “It’s really the average reserve per claim that we’re seeing accelerate,” she said.

Notable: Excluding Doylestown, Penn saw a 5.9% increase in patient volumes, Puchtler said. “That’s mostly outpatient,” she said. “Outpatient surgery, endoscopy, and some of our other infusion therapy are all increased over the prior year.”

Editor’s note: This article has been updated to reflect an additional medical malpractice charge in 2024, bring the total to $90 million.