UPMC's Community Investment Commitment Slammed In Study

PITTSBURGH, PA — The value of tax breaks UPMC Presbyterian received in 2020 far surpassed the value of what it spent on community investments, a new study has concluded.

The Lown Institute, a Massachusetts-based think tank dealing in health issues said that UPMC Presbyterian ranked first in the nation in what it terms "fair share deficits." According to the study, the hospital spent an estimated $246 million less in community investments than it should have.

The institute examined the finances of 1,773 nonprofit hospitals in the United States and found that more than three-quarters fell short in 2020 on expected investments in their communities.

Nonprofit hospitals are exempt from paying most federal, state, and local taxes in exchange for providing free or discounted care and programs that address community health needs, like substance abuse treatment, affordable housing, or access to healthy foods.

“Americans desperately need hospitals to use their billions in tax breaks as intended: to promote health while relieving the problems of medical debt and access to care,” institute president Dr. Vikas Saini said in a release. “These are charitable organizations and they should do a better job at prioritizing social responsibility over profitability.”

UPMC spokesman Paul Wood said that in 2021, UPMC provided $1.5 billion in IRS-defined community benefits, including $101 million in charity care. UPMC hospitals in Pennsylvania provide 28 percent of all charity care, he said.

"UPMC contributes more in IRS-defined community benefits and charity care than any other health system in Pennsylvania and ranks among the highest in charity care provided when compared to its national peers," Wood said via email.

Wood also referenced an American Hospital Association blog post on Tuesday that stated: "The Lown Institute’s latest report on hospital community benefits, like the previous one, is wrong and cannot be taken seriously as it once again relies on obvious biases and suffers from serious methodological flaws."

The institute calculated fair share spending based on 2020 IRS Form 990 by comparing the estimated value of hospitals’ tax exemptions to the amount spent on financial assistance and meaningful community investment. That would include community health improvement activities, contributions to community groups, community building activities, and subsidized healthcare services.

For hospitals that file as a group, such as UPMC facilities, expenses, income, and community investment data were prorated across hospitals based on their share of system revenue.

See the entire study here.