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Pittsburgh Votes To Expand ‘Amazon of Healthcare’ After Threat To Shut Down Hospital For Low-Income Patients

The University of Pittsburgh Medical Center informed the city of Pittsburgh that it would shut down a low-income neighborhood’s hospital if its plan for expansion was not approved.

Thirty-nine hospitals and more than 600 doctors offices and outpatient clinics throughout Pennsylvania are operated by UPMC.

According the the City of Pittsburgh Mayor’s Office, UPMC made it clear Mercy Hospital would close without the expansion.

“It was really discouraging to see our government fold under the pressure of a bully,” Summer Lee, a state representative candidate in the Pittsburgh area, said. “Because of the money and jobs UPMC has, just the threat of closing down a hospital is enough to cripple our government. That sort of power needs to be checked.”

The Pittsburgh City Council bowed to the demands of UPMC in a vote of 7 to 2 on July 31.

UPMC is already Pennsylvania’s largest non-government employer. But the city council’s vote may make it possible for CEO Jeffrey Romoff to achieve his dream of making UPMC “the Amazon of healthcare” and double in size over the next five years.

“No action was necessary until mid-October on this item,” Pittsburgh City Council member Deborah Gross contended.

Gross cast one of the dissenting votes against the expansion proposal.

A vote on the expansion proposal wasn’t required until 120 days after it was first introduced, according to the city council’s procedural rules. Gross motioned to table the legislation until the city council reconvened after summer recess in September, but that motion was rejected.

Gross explained her vote against the proposed expansion was a result of the lack of due diligence and opportunity for public input offered on the proposal. “My colleagues chose to take both the provisional vote and the final vote, which are normally taken five days apart, in the same day and basically 70 days early.”

The $400 million hospital expansion of Mercy Hospital in Pittsburgh is part of a $2 billion plan announced by UPMC in November 2017. The expansion will include the construction of a new vision and rehabilitation center.

The Service Employees International Union, Pittsburgh United, and several other organizations and activists opposed the proposal, claiming UPMC’s aggressive expansion has continued without paying its fair share back to the community.

A community benefits agreement was supposed to be attached to the expansion proposal, but the Pittsburgh City Council rushed through the vote with only a non-binding list of conditional promises attached. The list was reportedly compiled over the course of a day without input from community members.

“The community benefits agreement was a huge opportunity to move forward needs of the Pittsburgh community, and I think many people who took time to share their stories and take action are heartbroken that this opportunity to hold this corporation accountable has been lost,” Jennifer Rafanan Kennedy, executive director of the community organization Pittsburgh UNITED, shared. “The community health needs we should be concerned about are not being addressed by their proposed plans.”

The hospital chain operates as a non-profit, avoiding taxes while functioning as a profitable corporation.

A 2013 lawsuit was filed by the City of Pittsburgh seeking to revoke UPMC’s tax-exempt status by former Pittsburgh Mayor Luke Ravenstahl, who pointed out UPMC donates a small percentage of their revenue to charitable care while closing hospitals in low-income communities in favor of wealthy suburbs.

The next elected mayor of Pittsburgh, Bill Peduto, decided to drop the lawsuit in 2014, with the hope that UPMC and other non-profits would donate money for public services instead.

UPMC is the largest landowner in Allegheny County (which includes Pittsburgh) but pays no property taxes. UPMC did not respond to a request for comment.

Despite the dropped lawsuit, criticism toward UPMC’s tax exemption status and the benefits it yields to the hospital system remain.

Romoff receives over $6 million a year in salary and benefits while 24 other UPMC executives are paid more than $1 million in salary and benefits every year.

According to UPMC’s latest tax filing, only 2.66 percent of the UPMC system budget in 2017 was spent on subsidized or charity healthcare. The same year UPMC reported a $1.3 billion net income, which represented a 50 percent increase when compared to 2016.

“Our community is living in poverty as UPMC is buying up all the property, and the hospitals aren’t accommodating the community,” Nila Payton, an administrative assistant at UPMC’s Presbyterian Hospital, stated. She cited gentrification, racial health disparities, income inequality, and workers’ rights as issues UPMC continues to ignore.

UPMC refused to recognize all health insurance carriers as a way to shun competitors.

Since 2011, UPMC’s feud with a local health insurer competitor, Highmark, has impacted patients.  “As I’ve worked for UPMC all these years, it seems like they don’t care about their employees or the community,” Payton said. “UPMC is not paying their fair share and they hold the key to making Pittsburgh a better place.”

Activists, workers, and community members wanted UPMC to use the recent community benefits agreement to discuss with the community the best way to invest in improving the health of Pittsburgh.

“What could $2 billion do in advancing the health of Pittsburgh?” asked Lisa Sayre, a nurse at UPMC involved in union organizing efforts. “The union campaign started 8 years ago, and we’ve been asking for an increase in wages to $15 an hour and the right to form a union without being harassed. If there’s $2 billion to be spent, the claims that raising wages to $15 an hour now isn’t financially feasible comes into question.”

UPMC agreed in 2016 to raise their minimum wage to $15 an hour but delayed the increase until 2021.

Efforts to include a workers’ right to organize as part of the community benefits agreement were ultimately ignored.

The hospital chain has a history of union-busting and deterring employees from engaging in union efforts. The National Labor Relations Board found UPMC in violation of the law in 2013 for union busting activity, which reportedly included firing employees attempting to unionize, distributing anti-union documents to employees, and harassing employees engaged in union activity.

On August 6, 2018, a federal judge issued a similar ruling, once again finding UPMC in violation of labor laws for union busting activity.

The anti-union efforts continued into UPMC’s recent expansion plan. Pittsburgh Mayor Bill Peduto criticized the SEIU healthcare union for opposing the expansion plan, characterizing the opposition as “holding a hospital hostage that is going to cure the blind.”

“UPMC should be ashamed of their behavior in this situation, but I also think any elected official right now that would agree with UPMC’s methods throughout this process, which was classic bullying—and also repeat the rhetoric of blaming unions and workers—is irresponsible and really shows what side you’re on,” Lee concluded.

Michael Sainato

Michael Sainato

Michael Sainato is a Freelance Journalist based in Gainesville, Florida. His writing has appeared in The Intercept, The Hill, The Guardian, Denver Post, Truth-Out, and several other publications. Follow him on Twitter @MSainat1