Amid a fractious public dispute with its chief rival, Highmark and its health system are making a community investment that, though unlikely to turn a profit, may reap returns in loyalty and reputation.
Allegheny Health Network, the seven hospital system owned by Blue Cross insurer Highmark, has opened an urgent care center in Braddock, Pennsylvania, an impoverished mill town just outside Pittsburgh.
The clinic is the first major in-town healthcare provider for Braddock's 2,100 residents since 2010, when Highmark's chief rival, the University of Pittsburgh Medical Center, shut down a local community hospital.
"Since the closing of the former hospital in early 2010, borough residents have had to travel as far away as McKeesport or the city of Pittsburgh for their urgent care needs," said Highmark president Deborah Rice-Johnson. "The Braddock Urgent Care Center will fill a major gap in healthcare services for residents of the borough and surrounding communities."
Like other urgent care centers, the Braddock clinic will serve adults and children with basic primary care, non-emergency care, blood tests, X-rays and EKGs. Staffed by a physician and nurses, it's open 9 am to 9 pm weekdays and until 7 pm on weekends.
While the city of Pittsburgh and its wealthier suburbs have seen economic growth after decades of languishing, Braddock has remained a rust belt town whose mostly low-income residents have not shared in the region's prosperity.
Braddock is home to Allegheny County's only remaining steel mill in operation, the first one built by Andrew Carnegie in 1872. For the last 10 years, its mayor John Fetterman has acted as an activist and investor in Braddock's revitalization, buying and leasing space, spearheading civic ventures like a two-acre organic farm and a youth center, as well as getting arrested in a protest of UPMC's closure of the local hospital.
Critics like Fetterman charged that UPMC abandoned the community. UPMC bought the facility in 1996, invested $30 million over the next decade, but said the 150-bed hospital was losing millions, with less than half of its 150 beds in use.
Since closing the hospital, UPMC has offered transportation for Braddock residents to other hospitals, including the new $250 million UPMC East 10 miles away in Monroeville. The health system also helped fund an all volunteer free clinic sponsored by the Muslim Council of American.
But Braddock community advocates have campaigned for the presence of a more permanent healthcare provider offering a wider range of services, and now Highmark is getting accolades for opening the clinic. The Pittsburgh Post-Gazette editorial board praised Highmark for acting on "the belief that, as a not-for-profit organization, AHN and Highmark have a responsibility to make things right in Braddock."
Allegheny Health Network's clinic was built on the site of the former hospital's parking lot, as part of a $20 million public-private redevelopment project that includes housing, a community park, office and retail space. Highmark devoted $350,000 to fund the clinic, along with $150,000 through its foundation. Operating expenses are being managed by Allegheny Health Network.
"We are extremely proud and happy to help meet the healthcare needs of this community and further improve the quality of life for those who live here," said John Paul, Allegheny Health Network president and CEO.
Lauding Highmark, the Post-Gazette editorial board wrote that the insurer "didn't even do a market study to determine whether the center would make money; the assumption is that it won't."
That it will lose money to uncompensated care may not turn out to be true, though, since all of Braddock and the rest of the region have access to insurance. Pennsylvania is now expanding Medicaid eligibility under the Affordable Care Act, and urgent care clinics could be a win-win for beneficiaries and the provider's owners, even with the program's low reimbursement for primary care.
But whatever the financial loss or return to Highmark, the clinic is clear a short-term win in the arena of public perception, as a state-brokered divorce between the region's largest insurer and UPMC, the largest provider, takes effect.
As of January 1, many Highmark members lost in-network access to UPMC hospitals and doctors, although the two organizations are still arguing over how to apply the "continuity of care" provision in the agreement that lets Highmark members keep UPMC providers for ongoing conditions like cancer. If the two sides cannot sort it out, they will go into state mediation for the second time since the transition agreement was signed last summer.
In the long-term, western Pennsylvania could portend a possible future for American healthcare -- consumers choosing between two integrated delivery networks for both their insurance and healthcare needs.
While Highmark has been cultivating its Allegheny Health Network, sculpting a new system from the bankrupt West Penn Allegheny network, UPMC has been turning to other commercial payers and its own health plan, marketing heavily to individuals and businesses in the new ACA market. That's left Highmark in the position of having to protect its membership base, including public employee plans, such as a 1,000 member school district contract that was lost to UnitedHealthcare.