Pittsburgh, March 20, 2013 – State Senator Jim Ferlo (D-Highland Park) stood with Mayor Ravenstahl and others today challenging UPMC’s nonprofit status. He shared the following remarks:

“Good morning. I am here today to join with Mayor Ravenstahl and others assembled to support the City’s challenge to UPMC’s charitable status and the tax exemptions that flow from that status.  UPMC has grown to be an international health care conglomerate with corporation-like profits and privileges.

When I first took office, you may recall the effort of Mayor Caliguiri and his administration trying to collect some needed revenue for city services from Presbyterian University Hospital; the corporate roots of what has grown to be the world-wide UPMC network of companies.  I want to thank Mayor Ravenstahl for his leadership in advancing this just effort given the financial profile of what is now the University of Pittsburgh Medical Center (UPMC).

Today we are taking on this issue directly. UPMC’s income is largely exempt from taxes.  Yet, it is increasingly run like a for-profit company, paying its executives multi-million dollar salaries with perks, renting fancy offices and leasing corporate jets and helicopters, while jumping into new business activities, for-profit ventures, and overseas expansion.

There can be no question that UPMC’s focus on profits conflicts directly with what ought to be its primary charitable mission, namely, the provision of high quality care to those in need.  Many people here will recall the truly shocking revelations several years ago about UPMC running its liver transplant operation like a profit making venture.

More recently, the closing of Braddock Hospital and the opening of the “billboard facility” in Monroeville taught us that UPMC’s business model leaves communities where the need for vital health care and charity is greatest without that access to care.  In the past few weeks alone, we’ve read about pregnant women locked out of the obstetrician’s office and Community Blue patients turned away from their physician’s offices because UPMC is out to crush its competition.  Contract law is sacrosanct and many doctors were forced to sign agreements that fundamentally conflict with the moral standard of their Hippocratic oath.

I suspect people do not know that UPMC’s actual levels of charitable care – meaning free care to needy people – is not appreciably greater than that of for-profit systems in Pennsylvania.

UPMC’s resemblance to a for-profit entity also encompasses its treatment of its own employees; an area where they have criticized me, telling me to butt out of their business.  Its chief executive, my good friend Jeffrey Romoff, was paid $6 million last year and 21 other employees received over $1 million.  That’s more than twice what his counterparts at the Cleveland Clinic, Johns Hopkins or the Mayo Clinic earn.

At the other end of the spectrum, thousands of service workers are paid substantially less than a sustaining wage needed to support a family in Pittsburgh.

In its recent communication with workers, UPMC informed them that it made what they termed a “prudent decision” not to lead in wages for employees and advised them to cut back on cell phone usage, clip coupons, and ride their bikes to work if transportation was too expensive.  I get amused at the image of Jeff Romoff riding his bike down Rte. 8 to Butler Street and passing my District office on his way to work waving hello.

UPMC ranks third in our state, right after Wal-Mart and McDonald’s, in the number of full-time employees that are forced to rely on Medicaid to get health care.  We Senate Democrats, now joined with some Republican colleagues, are fighting to accept the Medicaid expansion in Pennsylvania which would allow us to expand insurance coverage to over a half million individuals.  When UPMC workers made the decision to join a union so that they could have a say in the system’s priorities, UPMC misspent our healthcare dollars to wage a vicious anti-union campaign, one that has already resulted in Labor Board charges implicating UPMC’s top executives, not to mention millions spent on so-called “union avoidance” hit men.

These are not the behaviors of an institution that is devoting its resources to promoting well being in our region, and I have not even mentioned health care indices, especially the despicable infant morbidity and mortality rates in the health care empire’s own back yard.  Do we have health care for profit or for meeting the health and wellness needs of our communities?

And because UPMC is our largest landowner, our largest health care provider, and our largest employer, the fact that it neither acts like a charity nor pays its fair share of taxes is the problem we need to confront and confront head on beginning with today’s announcement.

We are here to say to UPMC, if you want to turn away from your charitable mission and continue acting like a for profit corporation, then you ought to pay taxes like everyone else.  If you want to act like a charity, then it’s time to adopt practices and behaviors that put our communities first. In our city, the path to increased prosperity and health for the people I represent runs through UPMC. One way or another, UPMC must contribute its fair share.  Thank you.”

CORRECTION: I mentioned the exposure of UPMC’s liver transplant operation was done by “out-of-town” reporting and it was an error. National news media published information originally written by the Pittsburgh Tribune-Review, and they deserve editorial credit. Their original stories can be found online here:http://triblive.com/investigative/specialprojects/transplantingtoosoon/   I apologize for the oversight.