Penn State Health achieves substantial financial turnaround in FY24

Health system continues to deliver strong performance in first quarter of FY25

Penn State Health achieved a significant financial turnaround in fiscal year 2024, demonstrating improved performance across a range of metrics compared to the previous fiscal year. The organization has sustained its momentum with continued revenue growth in the first quarter of fiscal year 2025.

“Our disciplined practices have resulted in notable improvements in just one year,” said Paula Tinch, executive vice president of finance and chief financial officer for Penn State Health. “This strong financial position has enabled Penn State Health to further invest in its core missions of patient care, research and training the next generation of physicians.”

Penn State Health achieved operating income of $56.8 million in FY24, representing a $217 million improvement from the $160.5 million net loss recorded in fiscal year 2023. This was driven in part by a 12% improvement in net patient service revenue, which rose to $3.8 billion. Contributing to this growth were the operations of Lancaster Medical Center, which opened in October 2022, and the addition of Pennsylvania Psychiatric Institute, which became fully integrated into Penn State Health in July 2023.

The FY24 turnaround also reflects the organization’s focus on strong expense management. Although labor and supply costs rose due to higher patient volumes, cost-efficiency initiatives helped contain overall spending and supported net revenue gains.

The momentum carried into the first quarter of FY25, with net patient service revenue reaching $998 million – an $80 million increase over the same quarter last year. This growth was driven by strong inpatient volumes. Operating income for the quarter declined to $19 million from $31 million the prior year, reflecting the impact of a one-time settlement payment to Penn State Health last year that was not repeated in the first quarter of this year. Excluding this one-time transaction, first quarter operating income improved this year.

During the past five quarters, Penn State Health also saw significant improvements in other key performance indicators. The system’s days of cash on hand increased to 106 at the end of the first quarter, and its total unrestricted cash and investments strengthened during the period.

“Our focus on balancing financial responsibility with meeting the evolving needs of the communities we serve is yielding positive results,” said Deborah Addo, interim CEO of Penn State Health. “We remain committed to operating efficiently to ensure long-term sustainability while consistently reinvesting in key clinical services for the people of Pennsylvania and beyond. This dedication lies at the core of our mission.”

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