With 3 new hospitals in Pittsburgh, UPMC aims to be ‘Amazon of health care’
BEN SCHMITT AND WES VENTEICHER | Friday, Nov. 3, 2017, 11:05 p.m.
Western Pennsylvania’s dominant health care system has room to grow in a fiercely competitive market, UPMC’s president and CEO said Friday as he announced plans to build three specialty hospitals at a cost of $2 billion.
The system aims to fundamentally disrupt the way health care is delivered with the new infrastructure and advances in technology and medicine the hospitals will incorporate, Jeffrey Romoff told a room full of health executives, community leaders and media.
“UPMC desires to be the Amazon of health care,” Romoff said.
The Pittsburgh-based behemoth, which last year recorded $14 billion in revenues, announced a colossal plan to add the new hospitals to its already massive roster of facilities worldwide.
The undertaking constitutes the largest single investment in the health system’s history, and targets some of medicine’s most complex specialties: heart care, organ transplantation, cancer and vision.
“This city has arrived,” Romoff told reporters after a news conference at UPMC Shadyside. He said UPMC will be an “essential player” in the city’s promising future, bringing in new revenue from patients seeking specialty treatments and creating thousands of jobs.
“Beyond our enormous multi-billion-dollar capital investments, UPMC is fundamentally an export industry, attracting patients from across the commonwealth, nation and world, which defrays the cost of our expansion,” he said.
The three new hospitals will be built on the campuses of UPMC Presbyterian in Oakland, UPMC Mercy in Uptown and UPMC Shadyside.
Leslie Davis, senior vice president and chief operating officer with UPMC, said the new hospitals will mirror the concept of its existing specialty hospitals: Magee-Womens Hospital, Children’s Hospital of Pittsburgh and the Western Psychiatric Institute and Clinic.
“We are creating the digital hospital of the future,” Davis said. The digital component includes a partnership with Microsoft Corp. Romoff said additional information about the collaboration with Microsoft will come in the next few months.
Dr. Steve Shapiro, UPMC’s chief medical and scientific officer, said Microsoft with its analytics software will help better tailor individual care for each patient and boost cloud-based storage.
Romoff added: “We will apply technology in ways that will transform what today is often a disjointed and needlessly complex experience for patients and clinicians.”
The largest of the three new hospitals, UPMC Heart and Transplant Hospital on UPMC Presbyterian’s campus, will be 15 stories high and nearly 1 million square feet with 620 beds.
By converting rooms for outpatient space, offices and research, the expansion will not result in an increase of hospital beds, according to UPMC.
Friday’s announcement at UPMC Shadyside came with sleek, futuristic digital presentations, appearances from high-level executives and virtual watch parties for UPMC employees. A catered reception followed.
Pittsburgh Mayor Bill Peduto attended along with Allegheny County Executive Rich Fitzgerald and Dennis Davin, secretary of the state Department of Community and Economic Development.
Peduto said the announcement drove home for him the progress Pittsburgh has made since the collapse of the steel industry.
“After those decades of suffering, over those decades of wondering whether or not this city would ever come back, we finally are at that point that we knew we could get to,” Peduto said.
Fitzgerald said the UPMC projects will contribute to $10 billion worth of development projects he expects to see over the next five to 10 years in the region.
“(They’re) going to put a lot of people to work,” he said of the projects.
Even though UPMC’s nonprofit status means the county won’t collect new taxes directly from the hospitals, “there’s a lot of spinoff” from the projects, including added traffic at area hotels, restaurants and other businesses that are taxed, Fitzgerald said.
The UPMC news comes about two weeks after rival Allegheny Health Network and Highmark Health announced a $700 million expansion plan to build a new hospital in Pine and four smaller hospitals at undisclosed sites throughout the region.
The four so-called micro-hospitals will be built through a new partnership with Texas-based Emerus, a for-profit developer and management firm. AHN and Emerus will split construction costs with Emerus managing the hospitals.
Asked whether UPMC might raise health care prices to offset development costs, Robert DeMichiei, UPMC executive vice president and chief financial officer, said competition in the region protects against price increases.
“We are creating unique services,” DeMichiei said. “That creates a reason not only for people who live here to come here but for others to come here.”
He added that some of the system’s older hospitals, such as Presby, are in need of basic updates, which the project will provide in addition to the innovations.
Shapiro pointed out that most of its development over the past several years has been in areas outside of the city of Pittsburgh. Patients will still be able to receive local care in their respective communities.
“When patients get really, really sick, this is a place that will be world class with the new cures and the new therapies, and it will be a resource for patients throughout the world,” he said of the new hospitals. “If you live in the region, I would think you would sleep comfortably at night knowing that care is right around the corner.”
Ben Schmitt and Wes Venteicher are Tribune-Review staff writers. Reach Schmitt at 412-320-1991 or bschmitt@tribweb.com and Venteicher at 412-380-5676 or wventeicher@tribweb.com.
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