The Truth About the “Ad Wars” Between UPMC and Highmark

By: Paul Wood

Lost in concerns over the so-called “ad wars” between UPMC and Highmark is the fact that virtually every person in this region, come the end of the UPMC-Highmark contracts in 2015, will have the choice of full, in-network access to UPMC. That’s right—despite Highmark’s dubious ad claims—no one will be “denied” access to UPMC.
The people of western Pennsylvania will have more insurance choices than ever before to ensure the full, in-network access to UPMC they desire while their premium costs are being held down. And they’ll be living in one of the few cities in the country with two competing health systems that integrate both a provider network and an insurance company, the type of system that experts say can better coordinate care and lower costs.
So why can’t this promising new health care landscape in Pittsburgh be embraced and the ad madness we’re enduring be stopped?
Unfortunately, the answer is that Highmark refuses to give up on its fruitless quest of a UPMC contract. Undermining its own plan to “save” the West Penn Allegheny Health System (WPAHS)—a plan approved by the Pennsylvania Insurance Department (PID) and that is predicated entirely on the assumption of “no commercial contract” with UPMC in the future—Highmark is relentlessly pursuing by any means possible a new or extended contract with UPMC.
What Highmark wants would be bad for the former WPAHS (now part of the Allegheny Health Network), bad for this community, and bad for UPMC and the more than 63,000 employees who have helped to create one of the nation’s top 10 health systems.
If you don’t believe us, read Highmark’s own filings with the PID. Highmark has said that expiration of the contracts with UPMC is essential to saving the near-bankrupt WPAHS and that it can save that system only by steering 41,000 inpatient admissions on an annual basis away from UPMC and independent community hospitals. [Read UPMC’s Analysis of the PID Order Precluding a Contract With UPMC]
To better understand what Highmark would propose now, look no further than central Pennsylvania. There, Highmark has a tiered system in which Geisinger, one of the finest integrated health care systems in the state and often cited by President Obama as a model for the nation, has been relegated—as solely determined by Highmark—not to the better value (supposedly lower cost and better quality) “enhanced” tier, but to a second, more expensive “standard” tier for patients trying to access Geisinger. It should be no surprise that UPMC cannot and will not sign such a tiering-and-steering contract, especially with a competitor intent on shoring up its hefty $2 billion plus investment in a competing health system. After all, Highmark wouldn’t be investing all this money if it didn’t intend to fill WPAHS beds with its own subscribers.
Highmark’s ads would have consumers believe that without a Highmark-UPMC contract, many people will be denied access to this region’s leading health system, UPMC. Nothing could be further from the truth. In fact, 85 percent of health care consumers in the region already have the option to access UPMC’s services in-network through governmental programs or insurance carriers other than Highmark. And based on our discussions with leading employers, most if not all of them will be offering insurance options other than Highmark alone when the commercial contracts between Highmark and UPMC expire at the end of 2014. This means that virtually the entire insurable population of western Pennsylvania will have the choice of full, in-network access to UPMC by January 2015. To the extent that any Highmark subscriber uses UPMC services out-of-network after 2014, Highmark itself will decide how the additional costs associated with that use will be shared with subscribers.
Instead of trying to compel a contract with UPMC that clearly conflicts with and undermines the plan that the PID approved for Highmark’s acquisition of WPAHS, it’s time for Highmark to move on to planning a predictable and patient-friendly transition period. We need to work together to ensure that consumers can, if they desire, easily change their insurers or their physicians. It’s also time for Highmark to join UPMC in reassuring seniors and other vulnerable populations that their full, in-network access to UPMC will be preserved, as UPMC and Highmark jointly advertised in December 2011 and January 2012.
Once Highmark decides to live up to its plans and assumptions submitted to and approved by the PID to save WPAHS,  the ad wars will cease, and we can all move on to enjoy the innovation and lower costs of this new era in Pittsburgh health care.
Paul Wood is Vice President & Chief Communications Officer at UPMC.