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Health care providers UPMC, West Penn reach out

| Sunday, Feb. 12, 2012

In coming months, Pittsburghers can learn how to live with diabetes, keep their voices healthy or tame unruly toddlers, through free programs the region's largest health care providers offer.

The nonprofit health systems say community educational programs that cost them millions each year help to fulfill charitable missions. They can't hurt from an image standpoint, either, analysts say.

"If the programs are really good, they'll start to create a word-of-mouth aspect to them," said Bob O'Gara, professor of public relations and advertising at Point Park University. "They can really generate some good clients and good customers."

Peggy Morrison Outon, executive director of the Bayer Center for Nonprofit Management at Robert Morris University, said the programs enable health systems to "visibly demonstrate that they care about the community."

"They must demonstrate a broad base of community support in a variety of ways," she said.

The region's largest health care providers, UPMC and West Penn Allegheny, spend a combined $103 million a year to administer about 3,300 programs, according to fiscal year 2010 figures.

The state's largest insurer, Highmark Inc., a nonprofit that is acquiring West Penn Allegheny Health System, the region's second largest hospital system, offers similar programs to about 25,000 people a year. Spokeswoman Janice Maszle said she could not disclose the cost "for competitive reasons."

Highmark's program, Wellness Where You Live, "might provide an important tipping point when deciding upon a health insurer," Maszle said. The program covers personal nutrition coaching, weight loss education, management of chronic conditions and osteoporosis prevention.

UPMC and Highmark are embroiled in a public relations war, since breaking off talks to renew reimbursement contracts. Highmark's plan to acquire UPMC's chief rival for $475 million awaits regulatory approval.

Underscoring the turmoil is a persistent public questioning of the validity of the providers' tax-exempt status.

Titus North, executive director of the Squirrel Hill-based consumer advocacy group Citizen Power, said the giants "don't fit the definition of nonprofits as it was intended.

"These companies are able to amass huge reserves. If they were stock-issuing companies, these reserves would be called profits that would go out to shareholders," he said.

North points to UPMC's closing of its Braddock hospital, and subsequent planned opening of UPMC East in Monroeville less than a mile from West Penn Allegheny's Forbes Regional Hospital.

"They should be bolstering care to people in the area, not monopolizing," North said.

"Every time UPMC expands, it's taking land off the city tax rolls," he said. "The city's and county's financial problems are in large part because of an unintended outcome of nonprofit policy."

UPMC reported operating income of $240 million in fiscal year 2010. Subtracting Highmark's operating and claims expenses from operating revenue showed $675 million in operating income. West Penn reported a $92 million operating loss in 2010.

Large nonprofits often endure criticism for their tax-exempt status, said Joseph Geiger, executive director of the Pennsylvania Association of Nonprofit Organizations. Yet, without such entities Pittsburgh would be "a pretty miserable community to live in," he said.

"Every $1 they would pay to taxes is $1 taken away from their mission," he said.

Not all of the health systems' holdings are tax-exempt. Highmark paid nearly $260 million in federal, state, and local taxes, including property taxes, in 2010. That year, UPMC paid $55 million in taxes and other contributions to local, county, and state governments, and $172.7 million in federal and state employment taxes. West Penn Allegheny could not provide figures showing how much it paid in taxes in 2010.

Geiger said it's "fairly common" for health care agencies to use free community programs to fulfill part of a mission statement.

On average, 10 to 15 people attend each Wellness Where You Live session. Highmark members can attend for free at more than 100 locations, and nonmembers pay a nominal fee, Maszle said.

UPMC provides or contributes to more than 3,000 community health improvement programs each year, but could not supply attendance figures. It spent $101 million in fiscal year 2010 on community education, charitable initiatives and donations.

"Many of these programs target the unmet needs of vulnerable populations, addressing chronic problems such as diabetes, heart disease and cancer, as well as social issues such as teen pregnancy, violence against women, and elderly living alone," said Sean Logan, UPMC's vice president of community relations.

West Penn Allegheny offers about 300 free educational programs, screenings and support groups each year, said spokeswoman Kelly Sorice. It spent about $2.1 million on classes, support groups, health fairs and screenings in fiscal year 2010.

Sorice said attendance at such events can vary from 10 people to hundreds.

Such classes make people aware of West Penn Allegheny's services but "are not part of our marketing plan," she said. "We hope they provide a valuable community service."

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