UPMC is a health care giant. It employs more than 92,000 people, has an operating revenue of roughly $26 billion, and as a “non-profit”, it’s technically supposed to provide affordable healthcare to the people who need it most.
But its flagship hospital recently made headlines for being the least charitable non-profit hospital in the country.
How did we get here?
In 1969, the tax code was modified so that a hospital didn’t have to pay taxes as long as it was “promoting health.” Charity care became optional.
So Vikas Saini and his colleagues at the Lown institute decided to take a closer look at just how far some non-profit hospitals have strayed from their original mandate of giving back. They looked at over 1,700 nonprofit hospitals nationwide and calculated what they call the “fair share” spending for each. If a hospital took more money in tax breaks than it gave back to the community, it had a fair share deficit.
UMPC’s fair share deficit? $246 million in 2020.
Meanwhile, UPMC’s former CEO made $12.9 million in 2021. In total, top executives raked in $225 million — more than double what UPMC spent on charity care that year.
A recent survey found that 36% of UPMC workers are in medical debt to their employer.
But it’s not just UPMC. Of the 1,773 non-profit hospitals that the Lown Institute evaluated, 77% spent less on charity care and community investment than they received in taxes.
The total fair share deficit for all these hospitals totaled $14.2 billion in 2020.
That’s enough money to keep over 600 rural hospitals open, or to cancel the medical debt of 18 million patients.
What Happens Now?
In just the last ten years, UPMC has grown from 12 hospitals to over 40.
Understaffing is pervasive at UPMC — and it’s only become worse as the hospital has gained more and more market power.
In May 2023, a coalition of unions filed an antitrust complaint with the Justice Department. The complaint accused UPMC of using its market power to harm workers.
U.S. Representative Summer Less has called for the DOJ to use its authority and investigate UPMC. “We have an industry that’s able to grow and grow and grow while leaving the very communities that it should be serving behind because of its charitable status”