As the University of Pittsburgh Medical Center gets bigger and bigger, one real estate prospect might best symbolize what the health system has become: UPMC executives are considering a move to the 64-story U.S. Steel Tower.

The city's tallest building has long served as a symbol of the economic power once wielded by the region's industrial stalwarts. Now much of that power rests with knowledge-based and service industries, and there's no bigger local player in this arena than UPMC, with its more than 40,000 employees and business deals stretching from California to Qatar.

	University of Pittsburgh Medical Center Business: Operates 17 acute care hospitals in Western Pennsylvania and a specialty hospital in Palermo, Italy, while employing more than 2,300 physicians and associated practices. For-profit businesses include UPMC Health Plan, an insurance company with more than 707,000 members as of June 2006, and a cluster of 28 commercial entities and 10 venture funds in which UPMC has invested. The health system plays an active role in overseeing 15 of these companies, which employ more than 760 people. Headquarters: Pittsburgh Employees: 43,000 Operating revenue: $5.7 billion in fiscal 2006 Income: $525 million (including investment income)

Much as occurred with the corporate titans of the past, UPMC is finding that all that growth and influence is spawning conflicting sentiments about the region's version of Wal-Mart -- some marvel at its size and welcome its success; others seem to look for opportunities to sling mud. Its proposed merger with nearby Mercy Hospital has served to further stoke critics who fear the health system is just too big, allowing it to dictate prices, gobble up resources and leave competition behind.

If all the criticism is getting to UPMC officials, they are not letting on. On the contrary, they are moving forward with their own plan to grow the region's economy by creating a series of for-profit companies that will export Pittsburgh's health-care expertise to other markets -- a plan that in many ways could prove crucial to the region's economic success.

"We'd love to have an economy where we were the 10th largest employer, and we had nine Fortune 100 companies ahead of us," said Robert DeMichiei, the chief financial officer at UPMC. "But unfortunately as the region has had struggles with the transition from the steel economy, we've continued to grow."

UPMC is not the largest hospital company in the country, in terms of revenue or hospital beds. But what's relatively unique is to have such a large organization -- about $5.7 billion in revenue, with the country's 24th largest collection of hospital beds -- that operates primarily in one region.

That concentration creates a special role in economic development that the health system has begun to more fully acknowledge, said Robert Cindrich, the general counsel at UPMC. It also illustrates why UPMC is so focused in generating dollars from outside normal hospital activities.

In 2005, for example, it launched the Strategic Business Initiatives office that oversees a collection of small companies that are trying to commercialize the health system's expertise in health care, technology and health-care management.

The idea is to commercialize new products and services -- both from internal sources and outside partners -- to create new revenue streams in support of the core health care mission. At the same time, UPMC intends to foster economic development in the region through commercial investments, international services and the Center for Biosecurity.

All are part of Strategic Business Initiatives, which includes both for-profit and nonprofit ventures.

Early successes include the sale of Stentor Inc., a California-based company that UPMC created to commercialize hospital systems for digital X-rays and other radiology images, to Dutch firm Royal Philips Electronics for $280 million -- generating millions for UPMC and the University of Pittsburgh. UPMC in 2005 also signed an agreement with IBM to jointly spend up to $200 million over the next eight years to develop innovative computer technology for use in health care, though so far, the parties haven't agreed on any investments.

The past year also has brought separate agreements that would export UPMC's expertise in planning advanced radiation therapy treatments for cancer patients -- one involving a California company and two other joint ventures with hospitals in Ireland. In all three cases, the UPMC agreements mean business for D3 Advanced Radiation Planning services, a company in Shadyside with about 30 employees.

"UPMC has been key in our development," said Robin Green, the company's chief executive officer. "They are a major investor in our organization, and they are a large customer."

On the international front, UPMC since 1999 has operated a specialty hospital in Palermo, Italy, through a government contract. The agreement runs through 2012, with the Sicilian government paying up to $90 million for annual operating costs and UMPC receiving an annual, and declining, management fee of nearly $10 million. This year, UPMC and government officials announced a plan to jointly develop a related research institute in Italy.

Also this year, UPMC signed a $100 million deal to work as a consultant with the emergency medical system in Qatar, in the Mideast, and is talking with the national health service in England about establishing an information technology partnership that would be part of a partial privatization of that country's health system.

Closer to home, UPMC entered into an agreement in September to co-develop with Carnegie Mellon University innovative computer and software research for use in health care. It also is ramping up its work with CMU spinoff CombineNet, a Strip District firm that uses software to help large organizations get the best procurement deals by placing huge orders that involve multiple vendors.

CombineNet's health-care division is still small, accounting for five of 115 employees, but could grow to as many as 20 next year thanks to UPMC, said Tony Bonidy, the company's chief executive officer. The health-care giant has "invested substantial amounts of money into the company," he said.

Despite all the activity, realizing the goal of growing the local economy by creating companies that commercialize management practices at UPMC won't be easy.

For starters, there's competition. The regional economy of Nashville already is carving out a niche as the home to for-profit companies that make a business out of helping manage and run hospitals, surgery centers and dialysis clinics across the country, said Matthew Gallivan, president of the Nashville Health Care Council, a group that promotes that region's health-care economy.

Home to the nation's largest hospital company, HCA Inc., and 20 other publicly traded health-care companies, Nashville employs about 10,000 workers involved in managing health-care facilities in other markets, he said. "Everyone thinks of Nashville as country music," but it's a national center for health care, too, Mr. Gallivan said.

Another stumbling block in UPMC's path is more structural. Exporting management tools and software that work in one health-care system often is difficult because almost every institution develops and uses different practices, said Chris Coburn, the chief executive officer of CCF Innovations, a group at the Cleveland Clinic that is similar to Strategic Business Initiatives.

As the largest employer in Cuyahoga County, where it controls a large chunk of hospital beds in a market that's starved for growth, the Cleveland Clinic in many ways finds itself in the same position as UPMC. Only one of the largest private sector employers of 25 years ago remains, Mr. Coburn said, so civic leaders are looking to the clinic as an economic engine that will endure.

"There's no denying that in mature regions of the country, health care represents an oasis of economic growth," he said.

But such growth doesn't come easy. While the Cleveland Clinic has helped create 14 companies that are commercializing scientific innovations used in medical devices, diagnostic tests and pharmaceuticals, at least one of the companies closed due to a lack of outside investment.

"Even with the investment of a major institution, this is a high-risk business," Mr. Coburn said.

Unlike the Cleveland Clinic, UPMC's focus is to commercialize both management practices and information technology that can boost efficiency in health care. But it's not an area where academic medical centers have had a good reputation, said Glenn Melnick, a health economist at the University of Southern California.

"This is the first I've ever heard of anyone looking to an academic medical center for advice on how to become efficient," Mr. Melnick said. "Academic medical centers are a collection of fiefdoms ... and it's very difficult to get them to march in the same direction for some organizational goal."

Even so, it's possible UPMC might have something to offer if the health system truly is making a profit when treating Medicare patients -- something that Mr. Cindrich, the general counsel, says is true. About 43 percent of UPMC's net patient revenue comes from the government-run program.

"If that's so, then relative to the average hospital, they're efficient," Mr. Melnick said of UPMC. He added that, for an efficient hospital, "Medicare money is like an export -- it's entirely money that comes into your community from the outside, and it's a valuable industry to have."

Export is a word that comes up time and again as UPMC officials talk about how they're trying to grow the regional economy.

In addition to bringing in outside money through the Medicare program, the health system in conjunction with the University of Pittsburgh brings the region about $400 million per year in grants from the National Institutes of Health, and is bringing home more and more grant money from the U.S. Department of Defense, said Mr. Cindrich.

The health system's startup companies and international ventures are built on the same idea -- one that served the regional economy well back in the glory days of U.S. Steel.

"US Steel had huge facilities here, 40,000 or so employees -- so we're kind of like that," said Mr. Cindrich. "But where the real wealth came from was exporting from Pittsburgh to the world, and the money came back here.

"The notion of creating an export economy," he added, "Yes, we want to do that."