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Few winners in UPMC/Highmark battle

We are all Braddockers now. 

In 2009, UPMC announced its plans to shutter Braddock Hospital for lack of revenue -- even as the hospital behemoth planned a new hospital a few miles away, in prosperous Monroeville.  Braddock residents were devastated, and there was much hand-wringing about the profit motives of so-called nonprofits like UPMC. But most of us met Braddock's hardship with a shrug and a sigh. This is America, where everyone has the right to make a buck … and only poor people are supposed to worry about losing access.

Not any more.

Just like the citizens of Braddock, hundreds of thousands of Western Pennsylvanians may lose access to their health-care provider -- thanks again to decisions made in a corner office.

UPMC, as you've surely heard, has announced that in 2012 it will not renew its contract with Highmark, which insures more than 3 million Western Pennsylvanians. The reason: Highmark is seeking to merge with the Western Pennsylvania Allegheny Health System (WPAHS), UPMC's rival hospital network. UPMC says it can't be expected to do business with a direct competitor, although UPMC operates a health plan that's been encroaching on Highmark's turf for years.

It takes a lot to make Highmark seem like the good guy. Just ask Beth Heeb, the executive director of the Consumer Health Coalition. The CHC often opposes Highmark's actions -- like abandoning a state insurance program for low-income workers this year. But keeping WPAHS viable is good for customers, she says.

"It's shameful that UPMC seems afraid of competition and has decided to hold consumers hostage." 

Of course, that's not how UPMC portrays it. In newspaper ads, it maintains, "There is one thing that no one wants to change -- the relationships you have with your doctors" … even as Highmark customers face losing those very relationships. The ad then puts the onus for preserving those relationships on us: "[R]emember when it's time to choose your health insurance, you can keep your doctor." 

Except that many of us don't choose our insurance. According to the Kaiser Family Foundation, 55 percent of Pennsylvanians receive insurance through their employer. And "keeping your doctor" isn't their only priority. Even at CHC, Heeb says, the decision about which plan to offer employees is "pretty much price-based. I think that's how a lot of places are."

Prices may come down -- at least in the short run. UPMC has signed contracts with out-of-town insurers like Cigna and Aetna. That may indeed break Highmark's stranglehold on the insurance market.

But who will break the stranglehold of UPMC?

"I believe in markets, but they aren't infallible," says Alwyn Cassil, of the Center for Studying Healthcare Change, which studies trends in health care. In Pittsburgh and other cities, "You don't even have health-care markets: You have oligopolies." And though "Pittsburgh is a model for shifting from manufacturing to medical care, maybe it's too much of a good thing." For markets to work here, she says, local politicians and employers will "have to tell UPMC to go fly a kite."

But despite being "nonprofits," these two giants wield the kind of influence that Frick and Carnegie would have admired. Our factories may be gone, but we're still a company town.

For example: The top-ranking execs of Highmark, WPAHS and UPMC all sit on the board of the Allegheny Conference on Community Development, the region's preeminent business-advocacy group. Four other Conference board members also sit on UPMC's board. Highmark is a Harrisburg juggernaut, having helped cover the tab for former Gov. Ed Rendell's inauguration galas. UPMC operates a revolving-door jobs program for state legislators: state Rep. Adam Ravenstahl -- the brother of Pittsburgh's mayor -- worked there before going to Harrisburg. Former state Sen. Sean Logan, meanwhile, hired on at UPMC after leaving Harrisburg. 

It makes you wonder about all the fear-mongering over "socialized medicine." We can't have government-run insurance, apparently, because we don't want politicians running our health-care system. So we end up allowing the health-care system to buy and sell our politicians. We didn't want government bureaucrats forcing us to give up our doctors -- so now we're letting the private sector do the job. And the health-care industry's medicine can quickly become everyone else's poison. 

Just ask the people of Braddock.

  • Few winners in UPMC/Highmark battle

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