UPMC-Highmark Consent Decree: Where We Stand


Pennsylvania Attorney General Josh Shapiro announces his petition against UPMC

Sam Bisno, Editor-in-Chief

If you live in western Pennsylvania and you’ve ever seen a doctor or other medical professional, there’s a really good chance that you visited a University of Pittsburgh Medical Center (UPMC) facility: UPMC controls 41 percent of the market.

If you live in western Pennsylvania and you’re covered by some form of health insurance, there’s a really good chance that you’re covered by Highmark: Highmark controls 48 percent of the market.

If you live in western Pennsylvania and you use your Highmark insurance to pay for services at UPMC facilities (it’s estimated that that statement characterizes about 70,000 individuals), there’s a really good chance you won’t be able to continue doing that. Because if nothing changes between now and June 30, the current consent decree between the two healthcare behemoths will come to end, and UPMC will close its doors to Highmark indefinitely.

Key phrase: if nothing changes. Let’s examine how we got here.

UPMC is what is known as an integrated delivery network — essentially, that’s a fancy legal term that means it’s a hospital system that also owns its own proprietary insurance (UPMC Health Plan). Naturally, this incentivizes UPMC to find ways to drive as many patients to its own carrier as possible; if everyone has UPMC Health Plan, then UPMC can charge higher premiums. Moreover, UPMC doesn’t have to worry about negotiating reimbursement rates (the amount an insurer pays to a hospital for services rendered) if the insurer is a subsidiary of UPMC, whereas outside insurers will bargain for reasonable rates.

That’s all a little complicated, but suffice it to say that it’s in UPMC’s interest if patients ditch Highmark in favor of UPMC Health Plan.

This is where the consent decree comes in. As of now, UPMC is required to accept Highmark per the terms of that 2014 agreement. If things stand, that won’t be the case come July 1. If patients want to continue to go to the UPMC facilities that are most convenient for them and see the UPMC doctors they’ve come to trust, they’ll need to leave Highmark. But that’s not always so easy: the costs of plans vary drastically depending on the individual, and more than half of Americans get their health insurance through their employer, meaning they can’t just up-and-switch at the whims of entities like UPMC and Highmark.

Going uninsured isn’t an option, either. Debt.org found that the average cost of a 15-minute doctor’s appointment is $108. Meanwhile, surgeries range from $16,000 to $170,000 in out-of-pocket expenses. Hospital stays average $3,949 per day.

Now, you might be saying to yourself, “Well, that’s unfortunate, but it’s UPMC’s prerogative to choose who they treat, right?” That’s a great question. The jury is — quite literally — still out on that one.

You see, UPMC, in addition to being far and away the state’s largest employer, is a non-profit charity. It, like Highmark, is given tax-exempt status and can accept tax-free donations with the proviso that it “furthers the public good” (it should be noted that UPMC turned a profit of over $1 billion last year, has international investments, advertising galore, and pays its CEO $7 million, but that’s a different story).

Democratic Attorney General Josh Shapiro believes that in order to “further the public good,” UPMC must offer its world-class healthcare services to all residents of western Pennsylvania rather than discriminate based on insurance provider. That’s why he filed a petition in Commonwealth Court to mandate that all charitable, non-profit hospital systems must contract with willing insurance providers.

So here we are. For its part, Highmark has already agreed. UPMC, on the other hand, is challenging the appeal, and it was just announced that the petition will appear before the Pennsylvania Supreme Court on May 16.

There’s no telling what the ruling will be, but for now, educate those around you about the situation. The world takes its cues from western PA when it comes to healthcare, and whatever the decision, it will no doubt mark a seminal culminating moment in the ongoing struggle to determine whether the people of the region — the people that UPMC has committed to serve — are granted access to the top-notch care it promises.