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Thursday, December 22, 2011

Did UPMC just blink in dispute with Highmark?

Posted By on Thu, Dec 22, 2011 at 1:42 PM

As you may have heard, UPMC has agreed to extend its contract with Highmark until June 2013. That means Highmark subscribers will still be considered "in network" by UPMC physicians and facilities for at least another 18 months.

In a joint statement, the healthcare behemoths assert

Highmark and UPMC want to jointly announce that Highmark subscribers will continue to have access to UPMC hospitals and physicians at in-network rates until June 30, 2013. The additional time period will provide certainty for UPMC patients and Highmark subscribers. Discussion sessions have taken place with the assistance of Governor Corbett and via third party mediation.

Is that a sign that the tide has shifted against UPMC? That its executives are abandoning their take-no-prisoners approach? Or is the health-care giant simply playing for time?

There seems little question that recent action in Harrisburg has changed the dynamic. As I wrote in a column published yesterday, both the House and the Senate have acted on bills that would allow state officials to extend the UPMC/Highmark contract -- whether UPMC wanted to or not. State Rep. Randy Vulakovich, the sponsor of a bill in the House, told me he hoped the legislation would goad UPMC to shift its position:

Vulakovich hasn't heard from Corbett on his bill, but says, "I know he's doing work behind the scenes to bring [UPMC and Highmark] to the table. I hope I have made it easier for that to succeed."

This game of good cop/bad cop -- with Corbett playing the Officer Friendly role -- has apparently paid off. So says Dan Frankel, who cosponsored the Vulakovich bill. In a statement released a short time ago, Frankel says that the bill was "a shot across the bow, sending the clear message to both parties that the legislature is not going to sit idly by and let our residents lose access to affordable health care. The fact that this bill passed overwhelmingly with bipartisan support makes it clear to these business entities that we, too, mean business."

When I interviewed Frankel for my column, he predicted an outcome like this. Asked what the healthcare landscape would look like six months from now, he predicted that the contracts would be extended -- "either because we'll have voted in legislation, or because UPMC has come to the realization that they have to do it. The more the reality sinks in that we aren't going to sit and allow them to define the future of healthcare in western Pennsylvania, they'll probably try to do something" to preempt more sweeping government action.

In fact, it's worth noting that the concession here seems pretty paltry. Yes, UPMC has agreed to extent the contract's terms to 2013. But Highmark's position all along, you may recall, is that the current contract didn't expire until then in any case, thanks to a "run-out" clause. Highmark has, in fact, sued UPMC for claiming otherwise in ads.

And while the governor's office is stressing the need for further talks, a UPMC spokesperson has already told the Pittsburgh Business Times, "We are not negotiating."

Politicians seem to understand that without more progress, today's announcement merely changes the date of a healthcare Armageddon. Frankel's statement today asserts that while the agreement is "is a baby step in the right direction," the healthcare giants need "to put on their big kid shoes and start working toward a real resolution."

State Rep. Adam Ravenstahl is striking a similar note: "UPMC and Highmark need to continue negotiating toward a long-term contract, and I will continue to support legislative initiatives if necessary to reach that goal. Residents of Western Pennsylvania have demanded an end to this dispute."

So without continued pressure, it's possible that a year from now, we'll be in the same place we were as recently as yesterday. If anything, we might be worse off.

In my column this week, Frankel noted that President Obama's healthcare reforms will kick into effect by 2014, and that if the UPMC/Highmark break-up could be delayed until then, the bill's consumer protections might provide a cushion for residents. But of course, there's an election next year ... and if Obama loses his re-election bid and Democrats suffer in Congress, all bets on the future of his healthcare initiative will be off.

(Remember too that as attorney general, Corbett joined a lawsuit to overturn those reforms -- and while he's since begun taking steps to work with the new rules, he's being pressured by conservatives to keep them at arm's length.)

Arguably, nothing has better dramatized the need for healthcare reform than the UPMC/Highmark soap opera. Which means UPMC might not be the only organization in Pennsylvania that would like to cool the issue off ... at least until after the 2012 elections.

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