Is the UPMC Board of Directors Aware of their
Fundamental Responsibilities?
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 qualit y 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 Ricks Jennings, MHA, LFACHE
Senior Consultant
Senior Management Resources, LLC
JanJenningsBlog.Blogspot.com
412.913.0636 Cell
724.733.0509 Office
Reformatted March 13, 2023
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