A defining moment for UPMC

Would a real charity close a hospital where it's needed while building one where it's not?

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The citizens and political leaders of our community are right to raise an eyebrow over UPMC's unilateral decision to shut down Braddock hospital while spending more than $250 million to build a new hospital several miles away in Monroeville. The new hospital, if it gets constructed, will be in the shadow of the Forbes campus of West Penn Allegheny Health System, which has served that community for about 30 years.

Braddock hospital is the economic centerpiece of an underserved community with a high percentage of patients dependent upon Medicare and Medicaid for their health care. The hospital is Braddock's largest employer; it has the only ATM machine in town; it supports a senior citizens' center that was built next door so that the health-care needs of its residents could be accommodated. The decision to close the hospital was made without prior consultation with community leaders in Braddock or elsewhere.

UPMC, which owns Braddock hospital, is a Pennsylvania nonprofit corporation, a public charity. Its only reason to exist is to serve the public. It pays no taxes. It has no shareholders.

UPMC is governed by a board of trustees whose fiduciary duty is to assure that UPMC's assets are used to carry out its charitable mission. One might reasonably ask the UPMC trustees: What charitable purpose is served by shutting down an existing hospital in a community where it's desperately needed in order to build a brand new hospital (for $250 million) in a nearby community which already has one?

According to UPMC's financials, Braddock hospital has lost an average of $4.5 million for each of the last six years. Also according to UPMC, the organization is on track this fiscal year to generate $600 million in profits from its "charitable" activities. Should a public charity which generates that kind of money, the vast majority coming from the citizens of this region, support a community hospital by using less than 1 percent of its profits to subsidize the loss? Or should that charity be permitted to compromise the availability of care for the most vulnerable in our community in order to seek greener pastures, despite the severe patient-care and economic impact on the community that it is leaving?

This is a defining moment for UPMC and its governing board because the real issue here is about the values of that institution, not its money. Should a charitable service be delivered at the place where it is needed, or should it be moved to a place where it isn't? What is the point of a charity if it performs charitable acts only in places where they are profitable?

These are important questions that one presumes the UPMC board of trustees has considered. Thus far, the community has not been told by the board how it was able to reconcile the Braddock/Monroeville decisions with UPMC's charitable mission. The community is entitled to answers from the board of trustees.


David L. McClenahan is chairman of West Penn Allegheny Health System and a partner at K&L Gates law firm.


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