An Epidemic of Greed: How the University of Pittsburgh Medical Center and 'charitable' hospital systems like it put making money ahead of service to the public.

• Author: Longman, Phillip

In early March, public health officials issued warnings about what the spreading coronavirus could mean for the Pittsburgh region. Debra Bogen, director of the health department for surrounding Allegheny County, forecast that between 40 to 60 percent of the adults in western Pennsylvania could come down with COVID-19 unless strong mitigation measures were taken. The Harvard Global Health Institute predicted that Pittsburgh-area hospitals could need between 480 to 720 percent more beds than were currently available. Meanwhile, federal officials, ranging from the surgeon general of the United States to scientists at the Centers for Disease Control and Prevention, warned that hospitals would spread the contagion further if they continued performing non-urgent care.

Heeding this expert advice, Pennsylvania Governor Torn Wolf issued an executive order on March 19 requiring all the state's hospitals and doctors to stop performing elective procedures. Such surgeries are highly lucrative. But hospitals understood the gravity of the situation, or at least recognized Wolf's authority. Systems throughout the state quickly complied.

Except one.

In their headquarters atop the 64-story former U.S. Steel Tower in downtown Pittsburgh, executives of the University of Pittsburgh Medical Center (UPMC), a $21 billion hospital chain and health insurer, took a different course. Ignoring not only the governor's order but also an open protest letter signed by 291 of their own doctors, UPMC decided on March 20 that the 40 hospitals they control would continue conducting elective surgeries.

At a press conference, UPMC tried to justify its decision by asserting that there were only five known COVID-19 cases in the Pittsburgh area at the time, and that, despite insufficient numbers of tests, they were monitoring the situation closely. They also argued that they weren't technically violating the governor's order because the elective procedures weren't really elective, at least as they used the term. '"Elective' commonly means scheduled cases, but scheduled does not mean unnecessary," Donald Yealy, UPMC's chair of emergency medicine, said. Bogen disputed those semantics. "We ask that UPMC, like all the other health care providers in our community, begin to address this request from the governor and from us," she said. The Pittsburgh Post-Gazette, the city's leading newspaper, lambasted UPMC for its decision. The hospital system, they wrote, was "endangering lives by continuing to perform elective surgeries despite pleas by state and local health officials to postpone them."

It wasn't as if UPMC's managers could not afford to do the right thing. Though chartered by the state of Pennsylvania as a nonprofit, charitable institution affiliated with the University of Pittsburgh's medical school, UPMC has morphed over the past three decades into a money-making machine. According to its latest financial statement, the corporation commands reserves amounting to $5.5 billion in unrestricted cash and investments. Nor are UPMC's executives hurting for money. In 2018, UPMC President and CEO Jeffrey Romoff, who has said he seeks to make UPMC "the Amazon of health care," took home $8.54 million, while 33 other executives each earned more than $1 million. As the editors of the Post-Gazette wrote, "This cannot be a medical decision. It's a greed decision."

The tense relationship between UPMC and its surrounding communities has been building for years. A wide range of voices--from civil rights and labor leaders to local politicians and Pennsylvania's attorney general--have long accused the corporation of shirking its civic responsibilities, jeopardizing access to health care for millions of local residents, stripping doctors of their independence, and leaving rank-and-file health care workers struggling to make a living wage.

Pittsburgh, however, is not the only city with growing acrimony surrounding a nonprofit hospital. Most major metropolitan areas of the United States now feature large medical systems, typically affiliated with a local university, that wield extraordinary economic and political power. These institutions typically enjoy high margins because they face little competition, having spent the last several decades buying up, and often shutting down, rival hospitals. They are then able to charge monopoly prices for highly lucrative specialty treatments while downplaying medical services, like mental health and primary care, that don't pay well. They advertise these high-end treatments to rich medical tourists from across the world, offering them deluxe accommodations, while ignoring the poor and working-class residents who live, quite literally, next door.

Legally, however, these institutions are still considered charities. That's despite not just negligent attitudes toward their communities, but also their bottom lines. Many major academic medical centers make big profits. According to a study published in Health Affairs, seven of the 10 most profitable hospitals in United States are officially "nonprofits." An analysis by Axios of 31 prominent nonprofit hospital systems found that their...