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March 2, 2000

Discussion of UPMC dominates Pitt's 2nd appropriations hearing

HARRISBURG — The Passavant Hospital Foundation, formed when Passavant merged into the UPMC Health System in 1997, publicly suggested last year that the hospital might be better off leaving the health system.

The foundation went so far as to hire lawyers and accountants to gather evidence that UPMC Health System was on shaky financial ground.

But a Pitt senior administrator told state legislators yesterday that he believes the McCandless hospital and the health system will soon patch up their differences.

Arthur S. Levine, Pitt senior vice chancellor for Health Sciences and medical school dean, said at a budget hearing of the House appropriations committee: "The members of the board of UPMC Health System and the members of the Passavant Hospital Foundation have been involved in a continuing and progressive series of discussions and negotiations. The issues that have arisen have been largely over misunderstandings and misperceptions rather than issues of fact.

"My guess and my intuition is that these discussions will soon be concluded…and that Passavant will continue to be a partner in the health system," Levine said.

Chancellor Mark Nordenberg added, "I can say that I have been personally involved in some of the discussions and that they have been as Dr. Levine described them: both constructive and civil."

The administrators' comments were prompted by a question from Rep. Jane C. Orie, R-Allegheny Co., about the status of UPMC Passavant, which is located in her legislative district.

Passavant is the largest suburban institution in the UPMC Health System. In December, Passavant Hospital Foundation directors announced that they wanted to restructure their institution's agreement with the health system and regain governance over the hospital because of concerns about UPMC's financial health.

UPMC officials countered that the system has earned strong bond ratings and generated a $64 million profit during the fiscal year that ended June 30.

Prior to Rep. Orie's question about UPMC Passavant, Chancellor Nordenberg described Pitt's own relationship with UPMC Health System in glowing terms.

Nordenberg said the two institutions have worked well together in responding to threats posed by managed care and by changes in federal reimbursements for patient care and funding of medical education.

"Rather than being a drain on the University, as [academic] health centers have become in so many other places, UPMC continues to be a source of support," the chancellor said. That financial support is driven largely by the UPMC leadership's belief that what distinguishes UPMC in the marketplace is its status as an academic medical center, he added.

In an example of the Pitt-friendly questions and statements from House members that characterized yesterday's hearing, Rep. Dan B. Frankel, D-Allegheny Co., noted that Pitt's medical school ranks 74th among 75 accredited medical schools nationally in terms of state financial support.

Pitt's current state appropriation earmarks $6.57 million for the medical school. The University has requested $7.07 million for the fiscal year that begins July 1. Gov. Ridge has recommended $6.9 million.

Nordenberg pointed out that Pitt's medical school broke into the top 10 list of schools receiving funding from the National Institutes of Health during the decade between 1986 and 1997. In climbing to 10th place, Pitt passed UCLA and Stanford.

"UCLA enjoys state support at the level of $140,000 per medical student, and as you know, we're at $11,000, which is a pretty big valley to cross," the chancellor said.

Largely because of Pennsylvania's inadequate support, Pitt medical students graduate "with debts that most of us would consider to be staggering," Nordenberg said — $104,000, on average. That means Pitt medical graduates tend to go into more lucrative specialties rather than becoming general practitioners. It also means fewer Pitt medical graduates pursue careers in academic medicine, "which will produce the medical breakthroughs of the next generation," the chancellor said.

— Bruce Steele

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