UPMC eyes major expansion in cancer, cardiac care in North Hills

Nov. 26--From a robotic surgery tool that helps detect lung cancer sooner, to new alternatives to open-heart surgery, UPMC executives announced Monday a slew of major investments into expanding the health care system's services, equipment and doctors available in the North Hills.

The Downtown Pittsburgh-headquartered nonprofit behemoth is expanding its reach in the region's northern suburbs as places such as Cranberry continue to grow and patients there demonstrate the need for more specialty services closer to home, said Leslie Davis, chief operating officer of UPMC Health Services Division.

UPMC claims a roughly 65% market share in the North Hills region.

"As our health plan grows, as UPMC's clinical footprint grows, and this population grows, it just makes sense to keep adding capabilities here," Davis said.

UPMC officials did not provide a total figure for the amount of money associated with planned investments across its existing North Hills hospitals and clinics -- including not only equipment but the personnel and building costs associated with the expansions -- but they cited several examples.

Among them:

--A new, $2.5 million linear accelerator used to perform radiation oncology is being set up at UPMC Passavant's McCandless campus that does what existing machines do "and so much more," radiation oncologist Dr. Kiran Mehta said.

--UPMC Heart and Vascular Institute will begin to offer advanced procedures at Passavant to lower the risk of stroke in certain patients, as well as transcatheter aortic valve replacement, or TAVR, as an option instead of open-heart surgery.

--Passavant's McCandless campus is set to start using in March the Auris Health Monarch Platform, a new robotic bronchoscopy tool intended to help doctors detect lung cancer sooner. The $500,000 tool will allow doctors to insert a camera into hard-to-reach small nodules in the periphery of the lungs, and is pending FDA approval to be used to perform biopsies and other surgical procedures intended to kill cancer cells. It's operated by doctors using a remote that resembles an X-Box video game controller. The hospital's oncology center in McCandless will become UPMC's second ever to use the robotic tool and marks the first time the technology will be available in Western Pennsylvania, officials said.

"It's going to make us more accurate and be able to diagnose lung cancer earlier, which is really going to be able to save people's lives," said Dr. Peter Kochupura, a UPMC Passavant pulmonologist.

The Passavant Foundation recently donated $12 million toward North Hills expansion efforts that UPMC will match, for a total of $24 million.

Across UPMC's system, officials anticipate spending more than $1 billion in capital-related investments that benefit Western Pennsylvanians in 2019 alone. Through September, the total reached $737 million.

Total revenue grows, operating income down

UPMC took in $15 billion in revenue in the first nine months of this year -- $1.1 billion more than the same period last year, for a 10% increase, according to

UPMC's unaudited quarterly financial documents made public recently.

Over the same period, UPMC's operating income totaled $93 million -- down from $190 million at the same time last year, for a 51% decrease, records show.

UPMC Chief Financial Officer Rob DeMichiei attributed the drop to a combination of issues he doesn't expect to persist in coming years.

At least $26 million in negative financial impact can be attributed to anticipated first-year startup costs of participating in a state-run program called Community HealthChoices.

UPMC is one of three providers, along with PA Health & Wellness and Centene, participating in the newly available, $7 billion statewide program that provides additional services and support for Medicaid and Medicare patients with long-term health care needs.

DeMichiei said the program is expected to continue reporting startup-related losses until breaking even within the next year or so.

"We're learning as we go. It's a very large contract, a very complex population that we're dealing with," DeMichiei said.

Investment gains and revenue growth in other areas helped offset UPMC's losses, for a total net income as of Sept. 30 totaling $298 million.

The nonprofit health care system, which must pump profits back into operations, investments and community benefits, controls both provider and insurer arms.

UPMC's insurance membership grew by 5% from this time last year, up to nearly 3.6 million.

Now that a majority of Highmark patients can access UPMC facilities, UPMC expects to see its share of revenue from Highmark start to grow again next year, after dipping from 7% to 6% of its total patient revenue from 2018.

"We saw a big spike in commercial this year with people thinking about their strategies with the (then-presumed) end of the Highmark contract,"

DeMichiei said.

Natasha Lindstrom is a Tribune-Review staff writer. You can contact Natasha at 412-380-8514, [email protected] or via Twitter .

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