UPMC: Tax. Dodging. Medicine.

UPMC looms above Pittsburgh's skyline

Perhaps the most infamous case of UPMC’s behavior is the closing of its hospital in Braddock. In 2009, UPMC announced they would close UPMC Braddock citing that the branch was losing too much money – approximately $27 million over the previous 6 years [1].

Despite revenue of $7 billion that year [2], UPMC decided that the citizens of Braddock were not worth the cost. The announcement was a blow to the struggling community, meaning a possible loss of jobs for many of its citizens.

Meanwhile, UPMC poured $4 million into the salary, bonuses and benefits of its CEO[3], $16 million into an advertising campaign[4], and $240 million into a new hospital in Monroeville[5 that’s just 6 miles away from Braddock.

The hospital in Monroeville, UPMC East, happens to be across the street from rival West Penn Allegheny Health System's Forbes Regional Hospital. The project has been criticized as more of UPMC's monopolistic practices of removing rivals by buying them or driving them out of business [6].

The monopoly claim has become serious enough that in 2009 WPAHS filed an anti-trust lawsuit against UPMC, alleging that it conspired to push WPAHS out of business[7].

Despite behaving much like a for-profit company, UPMC has been able to avoid paying taxes to the city. UPMC is the largest private landowner in Allegheny County, avoiding nearly $40 million in property taxes. It also does not pay the $133 million in income taxes that it would be accountable for if it were for-profit. UPMC does not pay these taxes because they are a non-profit, which should obligate it to help the city in exchange for these tax exemptions. Pittsburgh could have used that money to pay for education and transit in a time of severe budget cuts. And had UPMC paid these taxes it still could’ve reaped $267 million in “profit.”

UPMC clearly does not base many of its business decisions on what will help the people of this city the most. We need to let UPMC know we will not let them stand for this, and need to make a decision on how the organization is run. They either need to conduct themselves in a way that puts people over profits, or pay the taxes that will help Pittsburgh’s citizens.

[1] http://www.wtae.com/news/21313350/detail.html

[2] http://www.bizjournals.com/pittsburgh/stories/2009/08/24/daily32.html

[3] http://www.post-gazette.com/stories/business/news/upmc-ceos-pay-twice-wpahs-chiefs-297660/

[4] http://www.pittsburghlive.com/x/pittsburghtrib/news/pittsburgh/s_704625.html

[5] http://www.upmc.com/aboutupmc/FinancialInformation/Documents/Q2-FY2012-Bondholder-Disclosure.pdf

[6] http://www.post-gazette.com/stories/life/sally-kalson/is-there-a-doctor-in-the-house-231354/?p=1

[7] http://www.post-gazette.com/stories/local/neighborhoods-city/judge-sends-west-penn-upmc-into-mediation-on-antitrust-suit-325859/


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