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Center for Innovative Science to open in Bloomfield in late 2014 |

Center for Innovative Science to open in Bloomfield in late 2014

Health care giant UPMC will build a long-delayed $294 million research facility in Bloomfield that’s expected to employ 375 scientists and support staff when it opens in late 2014.

The announcement was made on Thursday as UPMC reported a double-digit increase in revenue to more than $2 billion for the three months ended Sept. 30.

“Our growth during this period has been very, very robust,” said Robert DeMichiei, chief financial officer of the 20-hospital network.

The 350,000-square-foot research facility will be called the UPMC Center for Innovative Science. Once completed, it will include a renovated 150,000-square-foot former Ford Motor Co. building on Baum Boulevard and 200,000 square feet of new construction at the corner of Centre and Morewood avenues, UPMC said.

“Through the UPMC Center for Innovative Science, we will bring together leading scientists willing to develop bold, new approaches to understanding complex diseases, such as cancer,” UPMC Chief Executive Jeffrey Romoff said in a statement.

The 375 new jobs are a “drop in the bucket” if compared with the more than 180,000 health care jobs that exist in the Pittsburgh region, said Frank Gamrat, an economist with the Allegheny Institute for Public Policy, a think tank in Castle Shannon.

“That being said, any increase in jobs is a good thing,” Gamrat said. Plus, he said, the jobs are likely to be high-paying, which would produce more economic activity than a typical service-sector job.

The center’s scientists will work to identify genetic and environmental factors that determine the susceptibility of some people to cancer, officials said yesterday. The facility also will focus on personalized medicine and the biology of cancer and aging.

Dr. Steve Shapiro, UPMC’s chief medical and scientific officer, called the facility “a major investment in good science.”

Shapiro hopes scientists can develop better tools to diagnose illnesses. He offered as an example the prostate cancer screening tool known as PSA, or prostate specific antigen. The U.S. Preventive Services Task Force this month issued a draft report recommending that men with no symptoms of prostate cancer stop using the PSA test to screen for the disease.

“This isn’t a good biomarker,” Shapiro said. “We ended up treating a lot of men that don’t need it.”

The University of Pittsburgh’s medical school, which will be involved in the center, and UPMC are recruiting scientists. The center may also work with researchers from Carnegie Mellon University who could provide expertise in computer modeling of treatments, Shapiro said.

UPMC bought the 92-year-old Ford Motor building for $10 million in 2007. The health system previously announced plans to add research space there.

In July, UPMC dropped a plan to build a vaccine factory in Hazelwood. The $600 million to $800 million cost was to be split by UPMC and the federal government. UPMC’s DeMichiei said shelving of the vaccine factory plan had nothing to do with moving forward on the UPMC Center for Innovative Science, which has been in the works for years.

Also yesterday, UPMC reported strong operating results for its fiscal year 2012 first quarter, which ended Sept. 30.

Revenue was up 17.6 percent to $2.41 billion as more patients sought care at UPMC hospitals and the UPMC Health Plan, its health insurance subsidiary, gained new members. UPMC also benefited from its acquisition this year of Hamot Medical Center in Erie, which added $125 million of revenue during the quarter.

But a decline in the stock market over the July-September period led to an investment loss of $243.3 million, which dragged the system’s net income to a loss of $120.1 million. In the system’s fiscal first quarter last year, it recorded an investment gain of $163.1 million and net income of $225.3 million. UPMC officials have said net income is a metric more common to for-profit corporations and not appropriate for viewing UPMC’s finances.

The system’s $3.3 billion investment portfolio is not used to finance any operations and can vary widely from quarter to quarter, depending on stock market performance.

UPMC’s operations, however, remain highly profitable, officials said.

Income from operations was up 66.3 percent to $155.3 million in the quarter, compared with $93.4 million last year. This quarter’s results included a $36.6 million in incentive payment from the federal government for UPMC’s adoption of electronic health records. Without the incentive payment, operating income increased 27.1 percent year over year.

That strong growth was attributed to UPMC’s attracting more patients and insurance customers, DeMichiei said. UPMC admissions increased 13 percent in the quarter compared to last year, and UPMC Health Plan’s membership was up 10 percent.

“When folks can choose … they’re choosing UPMC,” DeMichiei said.

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