UPMC seeks to build large facility near Jefferson Hospital

Friday, January 22, 2016

Health system UPMC wants to build a hospital on about 80 acres in Pleasant Hills, less than a mile from rival Allegheny Health Network’s Jefferson Hospital.

ULCM LLC, a wholly owned subsidiary of UPMC, is challenging the borough’s zoning code in order to build a 300,000-square-foot hospital near Route 51 and Lindsay Snyder Drive. Among permitted uses, the municipality’s zoning of the tract does not specifically include hospitals, said Jim Rush, building code official.

In a statement, UPMC spokeswoman Gloria Kreps said the system was “once again demonstrating its commitment to investing in our region’s communities” by building the facility “to serve patients closer to home.”

“We look forward to working closely with the community in the process, which, pending approvals, will be a facility where many South Hills-based patients can receive the most appropriate treatments on an ambulatory basis whenever possible and where we will be fully equipped to provide emergency care, intensive care, preventive care and latest imaging technology,” the statement read.

The project is expected to create “hundreds of jobs in the region,” she said.

AHN officials sharply criticized the proposal, saying it would duplicate existing services, which would drive up the overall cost of health care.

“It’s a blatant, costly duplication of services,” said AHN spokesman Dan Laurent. “It’s a predatory action. The clear intent here is to weaken Jefferson and the other independent hospitals that serve the community.”

The Pleasant Hills zoning hearing board will discuss UPMC’s challenge at a public hearing Tuesday in the borough building. A zoning board determination is an early step in getting municipal approval for construction of the building, which could be up to five stories, Mr. Rush said. Borough council grants final approval for such plans.

Jefferson Hospital, which has 341 beds, was formed in 1973 with the closing of Homestead and St. Joseph hospitals.

UPMC’s bid for a new hospital nearby comes after Jefferson expanded its emergency room, added a number of medical specialties, such as neurosurgery, and invested $19 million in a maternity center, which opened in 2014.

Less than a year after the opening of Jefferson’s Women and Infants Center, the first new hospital maternity center in Pennsylvania in 30 years, hospital officials said usage had easily exceeded expectations. A total of 777 children were born at Jefferson in the first year.

The number of births was expected to eventually reach 900 annually, denting the number of births at UPMC Magee-Womens Hospital in Oakland, where nearly 11,000 children are born each year.

UPMC Health Plan already contracts with Jefferson to provide health care services, eliminating the need for another hospital in the area, said Louise Urban, Jefferson’s president and CEO.

No state approval is needed for the project. Pennsylvania has not had a review process for hospital expenditures on equipment and buildings since 1996, although legislation to re-create the state’s Certificate of Need program has been introduced many times since the law expired.

In addition, the courts have historically ruled against municipalities with land use zoning that omits particular uses.

“Hospitals by their nature serve a necessary community need,” ULCM LLC wrote in its challenge of the zoning code. “The borough’s exclusion of a hospital use is not justified.”

Plans for a new UPMC hospital raise questions about the future of the system’s McKeesport hospital, which is located in a town still smarting from the closure of a U.S. Steel plant in 2014, which put 260 people out of work, and more recently, its daily newspaper, which closed in December, causing the furlough of 51 people.

In 2010, UPMC closed its Braddock hospital, then two years later opened the 156-bed UPMC East hospital about 6 miles away in Monroeville. UPMC East is less than a mile from AHN’s Forbes Hospital.

“The parallels of what’s happening are clear,” Mr. Laurent said. “This isn’t about community need. This is really about UPMC’s ongoing drive to monopolize the market at the expense of other providers.”