UPMC to supplement income by managing Colombian facility
Payments for medical care may have flatlined at most hospitals in the U.S., but UPMC has been busy supplementing its revenue by marketing the health care giant’s expertise worldwide.
In the latest step in developing alternate sources of revenue, UPMC will co-manage the 200-bed Oncology Institute at the 870-bed Hospital Internacional de Colombia when it opens Thursday. The cancer center and hospital are located in Piedecuestra, where UPMC will provide training for doctors, cancer treatment guidelines and help in getting the hospital accredited by the Joint Commission International, according to Charles Bogosta, president of UPMC International. “What comes back to UPMC is alternative sources of revenue,” Mr. Bogosta said. “The opportunities in our pipeline are just enormous.”
UPMC, which has four divisions including UPMC International, operates more than 20 hospitals and a health insurance division with 2.9 million members. It reported total operating revenue of $12 billion for fiscal 2015. But like every hospital system, UPMC has seen reimbursement by Medicare and other insurers wither in recent years, with little hope of reversing.
UPMC’s long-term agreement with the Colombian cancer center anticipates an expanded relationship in other clinical areas of care, building on a relationship that began seven years ago between UPMC’s Children’s Hospital and Fundacion Cardiovascular de Colombia, which includes intensive care unit monitoring by UPMC doctors in Pittsburgh. The Colombia cancer center is UPMC’s first foray into South America.
UPMC has invested in hospitals abroad while also providing hospital advisory services that are expected to lead to management contracts, Mr. Bogosta said. The payoff: UPMC International generated more than $10 million in revenue in fiscal 2016 with other deals in the works. “We’re really optimistic right now,” he said.
The Oncology Institute was financed and will be operated by Fundacion Cardiovascular, a nonprofit organization in northeastern Colombia. UPMC runs more than 40 cancer centers worldwide.
Patients will receive medical and radiation oncology treatments at the new center, which is in a country that will see nearly 80,000 new cases of cancer this year, according to UPMC. The number of cancer cases was expected to grow to 113,000 cases annually over the next 10 years.