There is no question that Pittsburgh and Western Pennsylvania are richly blessed to have one of the top ten academic medical centers and associated hospital systems in the United States. Last year I observed with wonderment the acquisition of two intercontinental jets to fly the imperious leadership of UPMC to visit their international assets. So far we have been informed that UPMC operates a transplant center in Palermo, Italy; two cancer centers in Ireland and a partnership to provide emergency care in Qatar.
On February 29 it was reported that UPMC is now under contract to manage a hospital in Ireland. This strikes me as odd. As an Irish-American, like most of my kin, I would do anything for Ireland but live there. Notwithstanding, why is it necessary for UPMC to devote one scintilla of time and attention to manage a hospital in Ireland?
With the accounting systems unique to American hospitals, UPMC now has free cash per annum somewhere between $650 MM and $1 Billion per year. Okay, I may be off $100 MM here or there. However, every single dollar that has been paid to UPMC, directly or indirectly, was paid by the citizens of Pittsburgh and Western Pennsylvania.
The last time I checked, UPMC is a not-for-profit, tax exempt organization. This is a marvelous advantage in the market place. It is an advantage not extended to organizations like Alcoa, Heinz, National City Bank or the local barber. Why? The tax exemption is awarded to charitable organizations to improve the health status and the quality of life in their immediate communities.
There is a related, but somewhat different argument for the University of Pittsburgh, School of Medicine. There is an unwritten convention that medical science, as it is expanded, is to be shared freely for the benefit of all mankind. Jonas Salk did not sell the polio vaccine when it was developed at the University of Pittsburgh. It was a gift to the entire world.
No, my concern is on the hospital delivery side of UPMC. Is it in their mission to manage, build or buy hospitals outside the United States? If UPMC wants to extend its expertise outside the United States, why not focus those talents where it is needed most, the third world. I think we know the answer. It is the responsibility of the U.S. State Department and the related U.S. A.I.D. Program, the United Nations, the World Bank and other international agencies and religious organizations to improve the fragile health care delivery system around the world.
For many years the community benefited from a beautiful restaurant on the top of the U.S. Steel building. My understanding is the restaurant finally reached the point they could not afford the rent. Mr. Jeffrey Romoff is the current occupant of the top floor of the U.S. Steel building. UPMC seems to be able to afford anything. They can afford to build a transplant hospital in Italy, cancer centers in Ireland, manage a hospital in Ireland, provide emergency services in Qatar and international jets to flit around the world and God knows what else they are involved in.
Here is a challenge to the Board of Directors of UPMC. Rather than revel in its top ten status (U.S. News and World Report) how about investing excess cash to be the number one health system in the United States? For all of the television advertising, billboards, international investments and profligate spending, in what categories is UPMC truly number one. Is it patient safety and error free care? Could UPMC invest further in the University of Pittsburgh, School of Medicine to enrich the education and research infrastructure? The answers to these questions are above my pay grade. One thing is certain, if UPMC was the greatest and not just great, every dollar would be invested in Pittsburgh.
Emblematic of these concerns are current events reported in the Pittsburgh Tribune-Review. In a previous generation of leadership at UPMC, Dr. Thomas Detre, was successful in recruiting Dr. Thomas Starzl, perhaps the greatest solid organ transplantation surgeon in history to Pittsburgh. Dr. Detre was based in Oakland at the University of Pittsburgh. He did not have international jets at his disposal, he was not distracted by a health insurance company, nor did he have a transplant hospital built in Italy with Pittsburgh money. The solid organ transplant program at UPMC and the University of Pittsburgh, School of Medicine was the envy of the world.
A board member of UPMC said to me recently, “You have to hand it to Jeff Romoff. He really recruits first rate talent.” Is that so? UPMC and the School of Medicine attempted to replace a nearly retired Dr. Starzl with a transplant surgeon of questionable personal and professional qualities from a “B” level academic medical center (University of Rochester). The solid organ transplant program is now in a state of disarray. The University of Pittsburgh went from the number one solid organ transplantation center in the world to some lower level. This has occurred in an era in which UPMC has the money to be number one in every medical and surgical category in the United States. Is it possible that the Board of Directors of UPMC is anesthetized to clearly discern the extant circumstances? To an outsider, it appears that the focus to be the very best has been lost. Dr. Detre was not pampered in an aerie atop the U.S. Steel Building. He was in Oakland. He was focused on bringing international respect to the University of Pittsburgh and UPMC in Pittsburgh, Pennsylvania.
I do not criticize Mr. Romoff. He derives his authority from a board of directors that governs UPMC in ways that are startling. To quote an anonymous community leader, not invited to serve on the UPMC Board, “It is like they have turned the monkeys loose to run the laboratory.” What are they thinking? Would Dan Rooney build a football stadium in Beijing just for fun? I believe he is on the board of directors of UPMC and it appears that he keeps his investments pretty close to home. The same could be said for the other directors of UPMC. Does PPG build unneeded glass factories in Italy or Ireland or Qatar on a whim? I think not. Does National City Bank build banks in Europe just to see how they might do abroad? These questions seem just so silly. Not silly to UPMC. They seem to have more money than good sense. The Board of Directors gathers periodically and approves projects that will eventually draw attention like a bright light on the appropriateness of their tax exempt status. By the time the Justice Department and/or the Pennsylvania Attorney General catch up to this nonsense, Jeffrey Romoff will be retired and giggling.
You do not have to look far to find a hospital that missed the mark with respect to their primary responsibilities. The Hamot Medical Center in Erie, Pennsylvania lost their tax exempt status in 1989 for trying to improve the community by developing housing in downtown Erie. The episode dragged the organization through hell and back before they could have their tax exempt status restored. Excuse me, but their adjudicated malfeasance seems rather tame to the multi-national ambitions of UPMC.
It is altogether possible that when Mary Beth Buchanan, United States Attorney for the Western District of Pennsylvania finishes chasing every petty criminal in Western Pennsylvania she may turn her attention to more serious issues, like this one.
UPMC made a $100 million contribution to the Pittsburgh School Board. Wow. Now that is hard to criticize. On the other hand, is it the responsibility of UPMC to fund public education in Pittsburgh and Western Pennsylvania? Some, perhaps more cynical than necessary, thought the gift was a ploy to avoid paying UPMC’s fair share for fire safety, law enforcement, public works and other services in lieu of property taxes.
The way the organization is being governed is going to bait an enterprising elected official or law enforcement agency to raise the following question. Maybe UPMC should lose its tax exempt status if they can dabble in the international for-profit hospital market? Maybe UPMC has run out of ideas regarding the improvement of the health status of Pittsburghers and the other residents of Western Pennsylvania.
Beyond doubt, UPMC has paid good money to one or more of the best law firms in the United States to “paper the file” that everything they have done has been done in accordance with prevailing law. However, when the Justice Department pulls into town with an army of salaried attorneys, that “advance legal wall of defense” will go limp like a wet piece of white bread. There are several cases being litigated around the United States far less interesting than the extant circumstances at UPMC.
Someone asked me, “How does Jeff Romoff get away with such shenanigans?” Here is the answer. He is allowed to. It is like the question, “Why do people steal?” The answer is that they do not get caught . . . at least for a while. Sooner or later there is always a day of reckoning. Clarity of thought will catch up to the UPMC Board of Directors. It might come from Senator Grassley, R-Iowa (deeply concerned about tax-exempt abuses), or it might come from the Internal Revenue Service or it might come from the Justice Department or it might come from somewhere else. Have no doubt. The development of hospitals outside of the United States and corporate jets with dollars contributed to UPMC by the citizens of Pittsburgh and Western Pennsylvania will be stopped. When these reforms come, people will say, “How did this happen in the first place.” Here is the answer. No one got caught . . . at least for a while.
Of course, these are merely my opinions. You may have a completely different point of view. Let me know.
Jan R. Jennings
JJennings@Americanhs.com
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