Category: Cartoons, Commentary/Editorial || By

In an excellent column discussing Pittsburgh Mayor Luke Ravenstahl's challenge to UPMC's tax-exempt status, Chris Potter, editor of Pittsburgh City Paper, says the health care giant is involved in a "media sh-tstorm."

"When you're claiming to be a charity, it's hard to imagine worse PR than a lawsuit accusing your CEO of hiring a private chef, chauffeur and jet," Potter says. "These days, even the new pope supposedly cooks for himself and takes the bus."

After discussing UPMC's strong-arm tactics against patients and providers, Potter concludes: "There's something UPMC needs to understand: This is why people hate you. Because too often when they expect you to act like a charity, you claim you need to run like a business ... but when they want to tax you like a business, you insist you're actually a charity."

. . .

Here are some fun figures for you. The full market value of UPMC McKeesport's main campus --- including the Mansfield, Shaw and Crawford buildings, and the parking garage --- is $73,277,500, according to Allegheny County tax records. (Whether or not anyone would actually pay $73 million for buildings in McKeesport is, um, an exercise for your imagination.)

The adjacent Painter Building is assessed at $465,700, and the Kelly Building is assessed at $4,493,000.

Unless my calculator is broken, if those properties were subject to property tax, UPMC would owe the city $339,694 this year. The school district would be owed approximately $1.4 million.

. . .

Obviously, that doesn't tell the whole story of UPMC McKeesport's economic contribution to the region. The hospital employs more than 1,000 people, many of them in skilled or unionized positions, who earned $55.4 million in benefits last year, according to the hospital's own figures.

According to the same figures, UPMC McKeesport writes off --- donates --- about $10 million in charitable care to the Mon-Yough area every year.

(And that's not even considering the intangible value of having a world-class teaching hospital and its emergency room in Our Fair City. When I dislocated my shoulder and needed an MRI, you'd better believe I had it done right at UPMC McKeesport.)

. . .

It's also worth noting that the land under those buildings is only worth $585,400. The property is worth much more because of the improvements UPMC and McKeesport Hospital have made over the past 120 years.

If the hospital were gone, it's unlikely that anyone would pay $585,400 for the land --- what other value does it have? --- and those acres at the corner of Fifth and Evans avenues would be vacant land in a city already full of vacant land.

. . .

UPMC McKeesport estimates its total economic impact to the region --- spin-off jobs, purchases from suppliers, etc. --- at $274 million. That isn't chump change. McKeesport with UPMC McKeesport hospital is a lot better off than McKeesport would be without it.

Still, McKeesport area taxpayers are out $1.7 million, thanks to the hospital's tax-exempt status. With city officials scrambling every year to plug the million-dollar structural deficit in McKeesport's budget, and the school district cutting programs, that's a big deal, too.

According to U.S. Census data, in the neighborhood adjoining UPMC McKeesport, more than 55 percent of residents are below the poverty line. Up on Versailles Avenue, about 62 percent of residents are below the poverty line.

The streets next to UPMC McKeesport look like disaster areas. Some of that could be blamed on lack of tough building maintenance codes and lax property owners, but a big cash injection from the only major business on that intersection (say, $339,694, to pull a figure out of thin air) would go a long way toward cleaning up the blight.

. . .

Meanwhile, UPMC is by far the wealthiest health care system in the United States, according to a recent cover story in Time magazine. UPMC reported $769.7 million in operating profits --- $200 million more than the next-highest health care system, the Cleveland Clinic.

The same story by Steven Brill reports that CEO Jeffrey Romoff received $5.975 million in compensation --- more than twice as much as the CEO of the Cleveland Clinic, and $1.5 million more than the next-highest paid U.S. health care executive, the CEO of New York Presbyterian-Weill Cornell Medical Center.

Yes, UPMC is vital to the health (physical and economic) of our region. No one doubts that. But it's not crazy to wonder --- if UPMC is truly a charity, then shouldn't excess money be returned to UPMC's customers in the form of lower health care costs? On the other hand, if it's a making a profit, shouldn't it be paying taxes?

Ravenstahl, for whatever his other faults may be, is right to ask those questions.

. . .

It might be easier to ignore UPMC's arguably excessive revenues if it was at least a friendly giant. But as Potter points out, UPMC engages in bullying behaviors like refusing to accept patients who have Highmark insurance --- even if those patients are willing to pay cash.

True, Ravenstahl is leaving office at the end of this year, and you might say he has little to lose by taking on UPMC.

But it might be time for all of us to ask: Shouldn't other local, county, state or federal elected officials be following Ravenstahl's lead? (What would $1 million of Romoff's salary do to clean up blight along Evans Avenue?)

Even if Ravenstahl's challenge is unsuccessful --- and experts say it faces a difficult legal struggle --- it seems like it's long past time for the people we've elected to demand accountability from UPMC.

. . .

Opinions expressed in commentaries are those of individual authors, and do not represent those of Tube City Community Media Inc., its directors, contributors or volunteers.

Tube City Community Media is committed to printing viewpoints from residents of the McKeesport area and surrounding municipalities. Commentaries are accepted at the discretion of the editor and may be edited for content or length.

To submit a commentary for consideration, please write to P.O. Box 94, McKeesport 15134, or email tubecitytiger -at - gmail -dot- com. Include contact information and your real name. A pen name may be substituted with approval of the editor.

You are previewing your comment. Be sure to click on 'Post Comment' to store it.