UPMC's 24-member board faces criticism over management of nonprofit

UPMC's board of directors are facing ongoing criticism over how they manage the nonprofit health system's charitable assets, according to the Pittsburgh Post-Gazette

UPMC's 24-member board, comprising many philanthropists and high-level executives from the area, came under fire earlier this year when Pennsylvania Attorney General Josh Shapiro wanted to replace all of the members by 2020. Mr. Shapiro, who at the time was pursuing a legal resolution for a nearly decadelong fight between UPMC and Pittsburgh-based Highmark Health, accused the board of failing to oversee UPMC's charitable mission.

In a February filing cited by the Post-Gazette, Pennsylvania officials argued that the health system's executives and board "appear to simply prefer the status and perquisites associated with purely commercial pursuits rather than furthering the public's interests in high-quality, cost-effective and accessible healthcare." UPMC denied all claims made by state officials in court. In addition to directing its charitable strategy, UPMC's board members are tasked with deciding the future of President and CEO Jeffrey Romoff and his compensation. 

Despite their power, the board members remained silent during the Highmark dispute. After UPMC and Highmark agreed to a 10-year relationship to resolve their feud, the Post-Gazette asked to interview all 24 board members. Fifteen didn't respond, four declined to comment and five directed reporters to UPMC spokesperson Paul Wood, who said: "I will not make UPMC board members available for interviews on this subject."

The Post-Gazette dug deeper and reported that seven of the board members have disclosed conflicts of interest for business relationships with UPMC, which are legal. For example, three companies of which three board members are executives purchase health insurance from UPMC. A food distribution company led by one of the members received $3.6 million from UPMC in fiscal year 2018 for providing food to the health system.

When Becker's reached out to UPMC for comment, Mr. Wood disputed many of the details presented in the Post-Gazette's article, including the compensation of a UPMC employee who is related to a board member. Mr. Wood said the compensation was misreported as $242,000, when it is in fact $84,564, as disclosed in an IRS form shared with Becker's.

He pointed to a quote from an interview the Post-Gazette did with David Renz, director of the Midwest Center for Nonprofit Leadership at the University of Missouri-Kansas City, as a significant perspective on nonprofit board members' duty to speak publicly: "It is, in fact, an ethical obligation of a board member not to speak on behalf of the board unless the board delegates the responsibility or authority of doing so to them," Mr. Renz told the publication.

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