For a long time Pittsburgh’s UPMC has been flexing its market power and there’s been precious little that dominant local insurer Highmark Blues could do about it. UPMC has long been accused of similar tactics to Partners in Boston and Sutter in Northern California–facing down local insurers, forcing them to pay higher prices than paid to other systems, and using aggressive tactics to crowd out competitors. Highmark has reacted by trying to keep competitors alive, and finally has gone the whole hog and bought West Penn Alleghany the only other viable hospital system in the area. It’s likely that UPMC will end its contract with Highmark when it expires next year, and we’ll see the first in a new round of battles for market share between systems. But it surely won’t be the last across the nation as more and more hospitals will fight to fill the capacity they’re building by acquiring market share. I suspect the end won’t be pretty.
Filed Under: ACOs, Matthew Holt, micro
Jun 29, 2011
This is a very interesting development. Is this the first step in Highmark becoming the first Blue to be an integrated delivery system? If Highmark starts to go down that path, will UPMC aggressively grow as an insurer and not just a provider? In short, will we have a duopoly of Integrated health systems in western PA 10 years from now?
Probably not, but fun to think about.
I have to agree with Matthew that this is about desperately propping up the last competitive provider in a highly concentrated hospital market rather than trying to transform the system. Here’s a link to the Health Recon blog that analyzes the move and puts a stake in the ground about what will come next: http://bit.ly/recon1107a
It seems to me that Healthcare Fraud is the biggest problem with these companies. There is a movement to monopolize Healthcare facilities in
Pennsylvania. What are they going to do except pay themselves. There are Boards of Healthcare Providers that exceed their given powers. Some of these people have contacts with the Insurance Companies and Harrisburg Officials. Are you kidding me? These people claim to be giving quality care.