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Botched Surgery 

The soap opera continues ... and it ain't General Hospital

Which is worse? When health-care executives create a sprawling medical empire capable of governing our very lives? Or when they don't?

Last week, Pittsburghers were just settling in for another comfortable round of UPMC-bashing. A series of Pittsburgh Post-Gazette reports had just documented that the health-care giant owns more property in Allegheny County than anyone else … and pays property tax on almost none of it. But then came more surprising news: UPMC's only real competitor, the West Penn Allegheny Health System (WPAHS), was scrapping a $475 million deal to be acquired by Highmark. 

"Our impending partnership is over," WPAHS board chair Jack Isherwood told reporters. Highmark had set out to rescue the debt-ridden hospital system, but Isherwood said the insurer had since decided "[t]he only way out ... is to put the patients, nurses, physicians and suppliers ... at risk through bankruptcy." And that, he said, was what WPAHS had partnered with Highmark to avoid.

If you're suffering symptoms of whiplash, you aren't alone. Last year, UPMC itself warned that Highmark would help WPAHS too much. The insurer would abuse its role as a "gatekeeper," UPMC insisted, funneling policyholders to Highmark-owned facilities, and using UPMC's money to shore up rival facilities. But state officials forced Highmark and UPMC to renew their in-network relationship anyway … and these days, WPAHS sounds envious of Highmark's relationship with UPMC.  

"A reasonable rate increase ... such as the one Highmark recently gave to UPMC, would go a long way to toward stabilizing West Penn Allegheny Health System," Isherwood said, somewhat wistfully.

Highmark insists it had "been working in good faith with WPAHS," and that the partnership was "in the best interests of both parties and ... the entire community." But this is just the latest installment of a soap opera in which Highmark, UPMC and WPAHS alternately sue each other and end up in bed together. It's like a love triangle in which everyone else gets hurt.

State Sen. Jim Ferlo (D-Lawrenceville) speculated that the whole Highmark/WPAHS affiliation "was nothing more than a ruse." Highmark's interest in WPAHS, he surmised, was just a head-fake "to provide leverage in their negotiations with UPMC" on new rates.   

Ferlo may be giving Highmark executives too much credit for strategic thinking. This would, after all, make two busted-up marriages for Highmark executives in a single year, following the bizarre allegations involving former CEO Ken Melani's affair with an employee. And as the Post-Gazette reported over the weekend, after Melani's departure, Highmark execs may have reconsidered some of his other impulses, too.

UPMC, at least, saw trouble coming. Before state legislators last September, CEO Jeffrey Romoff noted that Highmark was taking on more than $1 billion in WPAHS pension obligations and debt. "UPMC will watch with interest as Highmark … faces the same obstacles that we in the provider community have confronted," he added. 

In other words: Welcome to my nightmare, suckers.

It's a nightmare which WPAHS nurses and doctors can't seem to escape. Many survived a previous effort to build a medical empire on the back of Allegheny General Hospital. The result was the 1990s AHERF fiasco, in which outsized egos drove the nonprofit into bankruptcy. 

Last week, Cathy Stoddart, who represents unionized nurses at Allegheny General, was trying to stanch the bleeding from the amputation her bosses had just performed. "We've been through this — we went through AHERF," she told me. "There's no Chicken Little feeling here, because we know the care we provide, and we know the public wants a choice in providers."

"We're not trying to take sides," she added, though workers hoped the partnership would continue. "As labor leaders, we've always believed that continuing to talk is the best medicine." 

The talking cure may not be enough: By the time Stoddart and I spoke, bond-rating agencies had warned that they were likely to downgrade West Penn's debt. WPAHS may find another willing buyer. But most observers seem to think a for-profit hospital chain is the likeliest option. And that may entail shock treatments, too.

So we're back where we started, with health-care giants that threaten either to trample us underfoot, or drag us down with them, all in the name of "competition." Can someone remind me why a government-run health system would be such a bad thing? 

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