My recent post on the battles between large health plans and hospitals/health systems generated a good bit of debate. One comment deserves special attention; “the other Joe” notes that the western PA landscape is marked by a combination health care system/health plan that dominates the region. While this type of vertical integration has been tried many times in the past with rather limited success, this version looks to be much better positioned to succeed.
But as the other Joe points out, there are significant costs associated with that “success”, costs that are borne by the system/plan’s employees, payers, insureds, patients, and employer customers.
Oct
12
Thanks for catching my post Joe…
As for the hospital network/health plan in my post – here is what they have to say about themselves:
…”UPMC is the premier health system in western Pennsylvania and one of the most renowned academic medical centers in the United States. During the past decade, UPMC has reshaped the health care landscape in western Pennsylvania. As a $5 billion organization and the region’s largest employer, it has transformed the economic landscape as well….Today, with 40,000 employees, UPMC comprises 19 hospitals and a network of other care sites across a 29-county service area…UPMC also has leveraged its world-renowned clinical services and patient care reputation into one of the country’s fastest growing health insurance plans, offering an array of commercial, Medicare, and Medicaid products….” Source: http://aboutupmc.upmc.com/
Here is their footprint in western Pa with a map: http://www.upmc.com/Hospitals.htm#
Do you speak Italian? These guys do that too at their transplant hospital in Sicily…! http://www.upmc.com/NewsStories/2004/ISMETT033004.htm
So, at least Pittsburgh gets great tax revenue from them – right…?
As a rule, non-profits are exempt from property and other taxes because they are warm and fuzzy and nice. They don’t do mean corporate things like buy up their competitors and shut them down or pay their executives huge sums of money. Unless you’re talking about UPMC, which does do those things but remains tax-exempt because anyone who objects is beaten up by UPMC male nurses and then denied anesthetic. Source: http://www.pittsburghcitypaper.ws/archive.cfm?type=You%20Had%20to%20Ask&action=getComplete&ref=584
More: http://www.bizjournals.com/pittsburgh/stories/2005/02/21/daily40.html
If this (not for profit) hospital network/health plan were an octopus – it would have 100 arms. Undoubtedly, as they claim, they have “reshaped the health care landscape in western Pennsylvania”… As many of their opponents have stated – another large facility under their wing could be a dagger in the heart of the healthcare system in the region. It would further limit choice for consumers, make life very difficult for competing hospitals, push out competing insurers, set the tone for reimbursement in the region, control the pay scale for nurses and other health care providers, weaken completion among suppliers and on and on and on…
As far as the payer – provider disputes heating up https://www.joepaduda.com/archives/000657.html – perhaps what we are seeing is a new style of contract negotiation I.E.: “Pay us what we want or we’ll impact your membership (and your bottom line)” – http://www.thekansascitychannel.com/health/10020572/detail.html?rss=kc1&psp=health
If – that be the case – just imagine what the 100 armed octopus in western Pa could do – since it owns a majority of hospital and clinics in the region as well as it’s own competitive health plan. Would there be any contract negotiation? It’s own leverage would even impact the ability of competing hospitals in the market with other commercial payers. The competing hospitals could expect little if any negotiation from the 100 armed octopus’ health plan as well…
Perhaps similar octopus’ already exists in other regions?
Here are a few other hospitals that I don’t suspect are “getting the shaft” from insurers…
I wonder what could become of this? http://www.iasishealthcare.com/home.htm
Arizona, Florida, Nevada, Texas and Utah…
Perhaps OSF is developing an “octopus” with a health plan? http://www.osfhealthcare.org/facilities.html
What would you call this? http://www.universalhealthnet.com/
and
http://www.valleyhealthsystem.org/
First Pittsburgh, then a region/Western Pa, then Sicily and now…. (drum roll please)…
http://www.centredaily.com/mld/centredaily/news/15779414.htm
I realize this particular post has nothing to do with provider payor debates but it makes me wonder. If the providers/hospitals have it as bad as some say – then how can hospitals afford this kind of stuff?
Looks as if the University of Pgh Medical Center’s health plan growth may have some competition… Ironically, UPMC’s largest hospital competitor – West Penn Allegheny is offering it’s 14,000 employees a CDHP from UnitedHealthcare.
On one hand – this provides an opportunity for competition which may benefit employers as well as employees. On the other hand this means that for those who elect the CDHP – such as nurses and other allied health workers, that perhaps the patients that they are taking care of will have better benefits than those providing their care (Highmark has 3.1 Million covered folks in WPA).
Is this WestPenn Allegheny’s attempt at “sticking it back to UPMC” for attempting to monopolize by buying up all the hospitals in the region? Could it have anything to do with the re-election of Govenor Ed Rendell, his kinship with unions and their relationship with UnitedHealthcare (Pennsylvania Employees Benefits Trust Fund is UnitedHealthcare’s biggest high-deductible client in the state and was a previous client of Highmark’s)? Or is it just a coincidence???
I smell something fishy here in the Three River’s area…