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UPMC feud with Highmark highlighted in national article

Ben Schmitt
| Wednesday, Feb. 14, 2018, 11:12 a.m.
UPMC President and CEO Jeffrey Romoff
UPMC President and CEO Jeffrey Romoff
Highmark Health CEO David Holmberg
Justin Merriman | Tribune-Review
Highmark Health CEO David Holmberg

The war between local health giants UPMC and Highmark Health drew national attention in a story published this week by the Washington Post.

The bitter feud between UPMC and Highmark dates back years and reached a peak in 2014 when their longstanding commercial contract expired. The contract gave Highmark insurance customers in-network access to UPMC doctors and hospitals. A state-brokered consent decree sought to smooth the transition and shield patients from the fallout, but the rivals clashed over its interpretation.

The consent decree that has preserved access for some Highmark members to UPMC hospitals expires in 2019.

During the height of the dispute, Highmark formed its own hospital system, Allegheny Health Network.

Last year, the Pennsylvania Insurance Department gave Highmark Health greater flexibility to invest in AHN, loosening requirements the department imposed when it allowed Highmark to form the hospital system.

The Post article describes the feud as such: "They could be mirror images of each other, flipped upside down. UPMC started out in the hospital business, then created its own health insurance plan and built a $20 billion-a-year enterprise. Highmark, which reported $18.2 billion in revenue last year, announced in 2011 that it would branch from insurance into hospitals."

Highmark CEO David Holmberg told the Post he is not as focused on advancing research but rather on providing quality health care.

"I want to keep people healthy; I want to keep them out of the hospital. Think of it like a consumer market," Holmberg said. "You can do things differently because you're not worried about heads and beds. You're not trying to fill up the hospitals."

UPMC unveiled plans in November to invest $2 billion to build three specialty hospitals in Pittsburgh focused on cancer, organ transplants, and heart and vision care. At the time, UPMC president and CEO Jeffrey Romoff said the health giant desires to be "the Amazon of health care."

He reiterated that desire in the Post.

"There's nothing in health care, that we know of, that UPMC doesn't have an entry into that marketplace," he said.

On Tuesday, the University of Pittsburgh and UPMC announced a partnership in a $200 million venture to bolster immunotherapy research and potentially spur economic development throughout Western Pennsylvania. The UPMC Immune Transplant and Therapy Center will be at 5000 Baum Blvd., a century-old, 200,000-square-foot building constructed by Ford Motor Co. that once served the dual purpose of assembly plant and showroom. When it opens in 2020, the center will focus on three areas: transplantation, cancer, and aging and chronic diseases.

Ben Schmitt is a Tribune-Review staff writer. Reach him at 412-320-7991, bschmitt@tribweb.com or via Twitter at @Bencschmitt.

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