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UPMC to reduce hiring pace and reorganize staff with reimbursements expected to be cut

| Saturday, April 20, 2013, 12:48 a.m.

In a move to slash costs, UPMC plans to reorganize its workforce and will cut hiring by up to 2,000 workers this year, a spokesman said Friday.

“Our growth pace has been very aggressive and we're just reducing that rapid pace,” UPMC spokesman Paul Wood told the Tribune-Review.

Wood emphasized that the region's largest employer with about 58,000 workers is not downsizing, but officials want to be cautious because UPMC expects more cuts in reimbursements from government and private insurers as the new federal health law phases in.

In its more recent financial report, UPMC posted $85 million in operating income for the first six months of fiscal year 2013, which began July 1 — down from $220 million over the same period a year before.

In any given year, UPMC hires about 2,000 workers, but the total number of hires this fiscal year will be between zero and 500, Wood said. UPMC's workforce could still grow, or at least remain stable, he said.

“If (UPMC President) Jeffrey Romoff wants UPMC to stop growing, then he should stop pressuring West Penn Allegheny Health System to close,” said Jan Jennings, president of the consulting firm American Healthcare.

Financially troubled West Penn Allegheny is under agreement with health insurer Highmark Inc. to be acquired for about $1.1 billion. UPMC has said it will not contract with Highmark after Dec. 31, 2014, because the insurer wants to steer patients to rival West Penn Allegheny.

The UPMC-Highmark feud recently led nurses from Allegheny General Hospital to field offers from UPMC promising higher wages, said Cathy Stoddard, president of the SEIU Healthcare Pennsylvania chapter that represents more than 2,000 West Penn Allegheny workers.

“They were deliberately trying to ruin our hospital by actively recruiting the more senior nurses,” she said. “We've held on to them.”

The union responded by offering UPMC nurses information about wages and benefits at Allegheny General, which both health systems argue are better at their organizations.

Wood said that although existing jobs might be reduced in some areas, new jobs likely will be created in information technology and customer service for the UPMC Health Plan.

Managers may hire workers in some areas, they may choose to even out the workforce through layoffs, or they may not replace employees who leave on their own, he said.

Luis Fábregas is a Trib Total Media staff writer. Reach him at 412-320-7998 or lfabregas@tribweb.com.

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