The headquarters for University of Pittsburgh Medical Center
and Highmark Blue Cross/Blue Shield dominate the Pittsburgh skyline
much as they organizations have dominated health care in the region for
decades.
Jeff Brady/NPR
Pittsburgh's dominant health insurance company and its largest healthcare provider are, essentially, getting a divorce.
For decades,
Highmark Blue Cross/Blue Shield and
University of Pittsburgh Medical Center
worked together. But as the line between insurance companies and health
care providers across the country blurs, these longtime allies are
venturing into each other's business and becoming competitors.
In
the process, patients can get caught in the middle. Day-care worker
Gail Jameson has Highmark insurance and she's been going to the same
UPMC medical office for more than 20 years. "I could go in and just stop
in if I needed to because it's close to my work," Jameson says. "I go
past it every day."
She's about five years from retirement and
was disappointed to learn her Highmark policy will no longer include
UPMC providers. She has to find all new doctors through another health
system that is unfamiliar to her.
The road to divorce began
when insurer Highmark got into the hospital business. It bought the
struggling West Penn Allegheny Health System, which was UPMC's main
competitor.
"Highmark stepped in in order to ensure that there
was competition in the marketplace and there would continue to be
consumer choice," says Highmark President and CEO David Holmberg. In a
town where UPMC controls more than 60 percent of the market, Holmberg
says there needs to be healthier competition among providers.
YouTube Highmark's TV ad from 2013 encourages UPMC to sign a long-term service contract.
There's another reason an insurance company would decide to become
a healthcare provider: the Affordable Care Act. It tells insurance
companies what basic services to offer; who they must insure and even
what percent of premiums can go to administrative expenses and profits.
That takes away a lot of what insurance companies used to do, so they're
looking for new reasons to exist.
"Insurers are trying to
demonstrate that they bring value to the table and are doing more than
just brokering a benefit ... and doing more than paying bills," says
Gail Wilensky, senior fellow at
Project HOPE.
Wilensky
says some insurance companies are responding by building more efficient
networks of high-quality providers. Highmark went a step beyond that
and became a provider of health care itself.
UPMC responded by
expanding its existing insurance business and refusing to sign a new
long-term contract with Highmark, saying it could not both compete and
work with Highmark.
YouTube UPMC's TV ad from 2013 explains why it can't sign a new long-term service contract with Highmark.
"We couldn't have a contract with them," says UPMC President and
CEO Jeffrey Romoff, "Because they [Highmark] have the burden of keeping
their provider side alive. So, for every one of their insurance
subscribers they will want to steer them to go to their own providers."
The
divorce of Highmark from UPMC is all but final now. An agreement
between the two companies will expire on January 1, 2015. The state of
Pennsylvania negotiated a
transition agreement. It does things like ensure Highmark subscribers already in certain kinds of treatment at UPMC can continue receiving care.
Now
the Pittsburgh health care landscape looks very different. "It went
from one of the least competitive environments that you can imagine — a
dominant insurer and a dominant health system joined at the hips with a
long term contract," says Romoff, "To one without a long-term contract
with, now, five choices."
In addition to the two new
competitors, UPMC invited three large insurance companies into the
Pittsburgh market: Cigna, Aetna and United Healthcare. "Competition is
good," says Romoff, "It keeps us all on top of our game. It gives us
incentive to not be fat and sloppy."
With competition come the
marketing campaigns. UPMC is banking on its good reputation. Highmark
will appeal to those concerned about price. "For some people their
monthly premium and the cost of their health care may be more important
than having access to everything," Holmberg says.
In Pittsburgh
now people have a lot more choices — and decisions — to make when it
comes to their health care. That's supposed to be a good thing. But for
Jameson, who was satisfied with her Highmark-UPMC combination, the extra
work is a pain. "I just don't like change. I shouldn't have to change,"
says Jameson.
It's not just patients dealing with change.
Employers who buy insurance for their workers face difficult decisions
too. With two insurance/provider networks that don't allow access to
each other, Pittsburgh employers can be put in the position of,
effectively, choosing which doctors treat their workers.
"Employers
want to provide benefits that allow them to be competitive and attract
and retain a productive work force," says Jessica Brooks, executive
director of the
Pittsburgh Business Group on Health.
"They don't want to be in the business of making personal life
decisions around who their employees can see and who they can't see,"
she says.
The Affordable Care Act aims to increase the quality
and affordability of health care. Creating competitive marketplaces is
part of the plan. It will be a few years before people in Pittsburgh and
around the country know whether the changes happening now make those
goals reality.
