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.
Categories: Matthew Holt