Marie O'Connor
Posted on 8 Nov 2009 2:19 pm (Report this comment)

The Minister for Health denies that co-located hospitals are all
driven by the profit motive, on the basis that three of them will be
owned by UPMC, technically a not for profit organisation.

UPMC is the biggest employer in Western Pennsylvania: it owns every
hospital in Pittsburgh (except two), controls the University of
Pittsburgh medical faculty, owns a huge private health insurance
company, and controls 400 doctors offices and long-term care facilities. Moreover, a significant number of its 27 subsidiariaries are for profit.

The corporation now dominates the Pittsburgh skyline as well as the
Pennsylvania economy. No expense has been spared by the not for
profit: fitting out its new penthouse HQ at the top of the city's
tallest tower reportedly cost $30m, with $1.5m alone spent on the
giant neon letters (UPMC) now planted atop the 64-story tower.

UPMC President Jeffrey Romoff earned $4.5m in salary and benefits last
year. Mr Romoff also got an undisclosed share of some $26m, shared
with a dozen favoured UPMC executives. The corporation owns two
private jets and makes around $7b., that is right, billion, in annual
profits, sorry, surplus.

What corporation wouldn't be a charity, when it can make this kind of
money as a not for profit empire, pay taxes only on its for profit
subsidiaries (in the US) and avoid the public scrutiny that comes from
public SEC (the Securities and Exchange Commission) filings, not to
mention our own CRO?

But for the Minister to pretend that UPMC has not come to Ireland for
the profit motive is absurd. Ireland offers major commercial and tax
incentives to hospital chains such as UPMC. Our zero intellectual
property tax, for example, is a potent attraction for software
developers. UPMC has formed a number of strategic alliances with
software giants, such as IBM. And, in addition to being sources of
revenue, hospitals offer proving grounds to companies for their
products. Beacon Hospital, for example, is the major testing site of General Electric in Europe. Finally, co-location offers a deal unrivalled
in the US, with taxpayers footing what would otherwise be UPMC's bill
for expensive medical staff (consultants) and their insurance costs
(via the Clinical Indemnity Scheme), while public patients guarantee
corporate profits (courtesy of NTPF and HSE).

One final point: UPMC owns two for profit cancer centres in Ireland,
controls a for profit hospital and is in partnership with a for profit
company, Beacon Medical Group. Are we to understand from the
statement made by the MInister that the Revenue Commissioners deem UPMC a charitable body for tax purposes?

Margaret Morris
Posted on 8 Nov 2009 3:16 pm (Report this comment)

Beacon Medical Group is behind with filing its accounts with the companies office. The last accounts filed were to 31 Aug 2007, they were filed very late incurring fines but this did not encourage Beacon to file the next years accounts (year to 31 Aug 2008) on time. These accounts are now months late. A friend of mine informed Ms Harney of this and was referred to the HSE - after reminders the HSE issued a short letter basically saying f..off, mind your own business!

Why does Beacon not want us to see what they are making?

As for UPMC being 'not for profit' this is amusing. If you pay your CEO and other executives the kind of money and benefits Ms O'Connor mentions in her post then you don't have any 'profits' as the profits have gone to management.

There should be limits on salaries and benefits for any organisation to have 'not for profit' status otherwise the term is meaningless.

barbie jones, RN
Posted on 8 Nov 2009 3:51 pm

This comment has been deleted

Margaret Morris
Posted on 8 Nov 2009 5:13 pm (Report this comment)

Further to my earlier post, when companies go for govt contracts they have to be tax compliant and up to date with all statutory filing requirements but it seems that once they have the contract, this doesn't matter anymore. I was quite shocked when my friend told me that both the minister and the HSe did not care when the Beacon's non compliance was brought to their attention.

When Beacon filed( and filed late) the accs to 31 Aug 2007 the accounts showed a big loss and the auditors said that the losses continued in the new financial year. The accounts for this year to Aug 2008 are the ones that are now outstanding.

For all we know the Beacon group may now be insolvent yet the they have 3 co-location contracts. Where does the taxpayer stand in all this?

A private hospital in financial trouble has an incentive to work the system and get as much as possible for the medical insurers. I heard about a patient in the Beacon (and I hope this is an isolated incident) who was kept in hospital much longer than necessary completely against the view of the medical professional on the case - obviously because the management wanted to claim as many overnight days as possible from the patient's insurers.

Last week we heard about the surgeons in Donegal with little work because budgetary issues had limited the opening of the operating theatres In Letterkenny - ultimately forcing patients into the NPTF and places like the Beacon at great cost to the taxpaper who is paying the Donegal surgeons who want to work to do very little.