When elephants duel the only ones who really get hurt are those poor souls unlucky enough to be between them. Locally we have a somewhat nasty fuel between two health care behemoths. The University of Pittsburgh Medical Center (“UPMC) has not so quietly been gobbling up hospital after hospital after hospital. They have built an impressive array of first-class medical facilities and propelled the Pittsburgh Region to the forefront of quality health care centers. Highmark is is behemoth 2 and has been the local service for Blue Cross/Blue Shield and one of the larger insurance providers in the area. UPMC go irked recently when Highmark took steps to purchase UPMC’s largest (actually quite smaller) competitor, West Penn Allegheny who have severe financial problems.
UPMC didn’t like the fact that Highmark, the insurance company, was treading on its turf and told Highmark that it would not longer give preferential rates for its patients once the current contract runs out in June 2012. Funny thing is that UPMC also provides health insurance. This seems like the pot calling the kettle black to me. I have an obvious concern as my employer offers Highmark insurance and not UPMC insurance, but all of our family doctors are UPMC. There are thousands of us who will be entering 2012 with a large cloud over our insured heads.
The fued has even spilled over into the world of television as paid political advertisements have been popping up though mostly from UPMC. The ads are not “political”, but deserve that tag as they really do not, in my opinion, tell the whole story. In a nut shell UPMC got mad because Highmark is getting into health care service on their turf. Highmark for some reason decided to piss off its biggest service provider, perhaps because UPMC ventured into the insurance business. The only real loser on the horizon are the residents who have Highmark insurance and live in western Pennsylvania. In other words a lot of us.
Many politicians are weighing in (i.e. sticking their noses in) which may mean legislation that will on the surface seem to benefit citizens, but will in the long run really screw us through higher rates or poorer service and most likely both. Highmark is relying on political ends to achieve its goal.
“Highmark continues to support efforts by both the Pennsylvania General Assembly and the Corbett administration to get UPMC back to the table to negotiate a new contract so we can preserve for all Western Pennsylvanians affordable access to community assets that were funded by and supported by taxpayer grants, local philanthropy and subscriber premiums,” Highmark spokesman Michael Weinstein said. UPMC refuses to negotiate because it says the combined insurer-health system would have to steer customers away from UPMC and toward West Penn Allegheny. It prefers what has been called an orderly divorce from Highmark.”
Bad thing is that UPMC and probably Highmark have liberally hired lots and lots of former politicians who have friends who are still politicians. I favor a more free market solution to the issue. UPMC has every right to decide not to renew its contract with Highmark just as Highmark has a right to buy West Penn Allegheny health system. Let them duke it out! However, if they want to act like free market corporations they should be treated like free market corporations. You see both UPMC and Highmark are “non profit” entities and pay no property taxes. The article linked above (blue highlighted text) reported that UPMC has $9,000,000,000 in revenue and owns 20 hospitals. That’s a lot of money and a lot of tax-free property. I don’t know Highmark’s numbers, but my guess is that it is substantial too.
There are a lot of municipalities who are hurting for revenue and could use the boost they would realize if these corporations would pay their property taxes like other corporations. The mayor of Pittsburgh tried to get this a few years ago, but was more or less beaten down. Skip the legislation and get out the auditors if these players won’t play.