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CBS Calls Out UPMC

From CBS This Morning: University of Pittsburgh Medical Center (UPMC) "made $948 million in profits from 2011-2012."  And tax returns show UPMC spending just 2% of its annual budget on charity care.  And UPMC's CEO, Jeffrey Romoff, makes almost $6 million a year.  And Romoff also has more than a dozen administrators that take in annual salaries of over $1 million a year.  And now Pittsburgh Mayor Luke Ravenstahl is suing to revoke UPMC's nonprofit status.  Good.  I hope he wins.

From the article:
Professor Martin Gaynor of Carnegie Mellon has published papers on hospitals that enjoy nonprofit status but do not always function like charities.
"There's a lot of concern here in the community," Gaynor told "CBS This Morning."
"They've taken some actions that don't appear to be consistent with an organization whose mission is to benefit the community."
Some of UPMC's funds are directed at facility improvement, but Gaynor has concerns about even some of that spending. He likened the new, state-of-the-art pediatric center to a palace.

"It's a tremendous asset to the community," he said. "On the other hand...one has to ask whether it was so important to make it so beautiful, or whether some of those dollars could've been used to better purpose -- to offer lower prices to members of the community, to offer more charity care."

Hard to argue with the Gaynor, isn't it?  I've worked in and around not-for-profit healthcare for most of my career and it's not that difficult to distinguish community benefit-centered organizations from the edifice-centered.  I know which I prefer.  And I wish the others would stop kidding themselves, the IRS and us.

More of my thoughts on hospitals' tax exemption, in this post about the politics of tax exemption in Illinois.

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