Leaders of two warring healthcare healthcare institutions argue that a near-duopoly will benefit consumers and patients. The trouble is that a 60-year-old piece of the tax code leaves many without real choice.
"The worst-case scenario is that we save this marriage," said Jeffrey Romoff, president and CEO of the University of Pittsburgh Medical Center at a Kaiser Family Foundation-hosted interview with the Pittsburgh Business Times. He was describing the state-brokered breakup of UPMC and Highmark, western Pennsylvania's two main health insurers and healthcare providers.
So goes the region's new healthcare market two years after Blue Cross giant Highmark acquired the near-bankrupt West Penn hospital system to form the Allegheny Health Network, introduced the low-premium "Community Blue HMO" excluding UPMC facilities and then unilaterally ceased paying UPMC oncology clinics facility fees.
Highmark and UPMC's consent decree established a framework for the two organizations to go their separate ways--for each to operate an integrated delivery network--but with UPMC access preserved for emergency care and vulnerable populations covered by Highmark.
When Highmark stopped paying what have been termed "markups" on oncology care, UPMC moved to shut off in-network access for 182,000 greater Pittsburgh seniors on Highmark's Medicare Advantage plans. UPMC maintains that Highmark owes $143 million for cancer care, and that the consent decree would allow ending Medicare Advantage member access since those patients can switch to its own MA plan, UPMC For Life.
A Pennsylvania judge largely sided with Highmark, arguing that Medicare Advantage members are considered an at-risk population and ordering the two into binding arbitration, although UPMC is planning to appeal to the Pennsylvania Supreme Court.
In any case, leaders at Highmark and UPMC Health Plan each believe that the future is one of competition for customers to their respective physicians, clinics and hospitals--and each pricing their individual, group and Medicare plans to attract customers to their integrated networks.
The Highmark-UPMC divorce is a good thing for consumers and patients, argued Romoff, who has been married four times. It's already putting pressure on the plans to lower premiums, to a greater extent than if more broad, in-network access to UPMC were the norm in Highmark plans. "We do our best and the public makes its choice. If you deliver the highest quality of care, you win," he told the Pittsburgh Business Times.
Romoff, age 69 and a 42-year veteran of UPMC, is confident that the academic health system's brand of "Life Changing Medicine," a sprawling presence and 3,500-employed doctors in dozens of specialities will sustain legions of loyal patients.
Highmark CEO David Holmberg, age 55, also sees this breakup as one benefiting greater Pittsburgh patients, with competition bringing affordability and incentivizing new approaches healthcare. Highmark, though, is trying to nurture a new connection with patients rather than relying on an established one.
"Our customers need things to be different: 'Take care of me when I'm sick and keep me healthy,' which means not focusing on filling hospital beds," Holmberg said recently at a gathering of America's Health Insurance Plans.
Holmberg argues that a large part of Highmark's strategy is collaborating with clinicians at the Allegheny Health Network to reduce the bureaucracy standing between them, patients medicines and treatments.
Highmark and Allegheny Health Network started a program called Vitality., Holmberg said. Docs and clinicians can bring ideas for new practices, devices or drugs, which will be funded or rejected within 60 days. Holmberg also encourages Highmark and Allegheny Health Network executives to spend time in the trenches, as it were, sitting in the waiting rooms at hospital emergency departments to see what the experience is like.
While western Pennsylvania does have other, smaller health systems (Excela Frick, Butler Memorial, Sharon Regional) as well as other insurers, this kind of choice between two giant integrated delivery networks each with large market shares is not seen in most other parts of the country.
With both UPMC and Highmark marketing their health plans and the options for healthcare, many seniors and individuals in greater Pittsburgh and western Pennsylvania can choose their exchange or Medicare plans based on which integrated network they want and how much they want to pay.
But as many 1 to 2 million of western Pennsylvania's 4 million residents really don't have this choice--it's up to their employer if they're covered in a group health plan.
This is one of several major barriers to meaningful competition and choice that tax-exempt employer-sponsored health insurance has wrought on the U.S. healthcare system for more than half-a-century. It's a barrier not lost on the people affected by it.
"All I can say is that for many years our family had UPMC, my husband changed jobs and was not given a choice but to go with Highmark," commented Gina Jones Plummer, an area resident, in the Pittsburgh Tribune Review. "It is absolutely ridiculous in this day and age not to be able to use major Pittsburgh hospitals because of in-and out-of-network decisions."