Becker's Hospital Review

7 CFO / FINANCE Lawmakers go after UPMC By Molly Gamble T wo Pennsylvania lawmakers are setting their sights on UPMC, elevating allegations published in a report from the American Economic Liberties Project that accuses the Pittsburgh-based health system of building a monopoly. e American Economic Liberties Project, a nonpartisan organization established in 2020, published an 18-page report on the nonprofit health system, titled "Critical Condition: How UPMC's Monopoly Power Harms Workers and Patients," Jan. 19. e report is introduced by Pennsylvania State Rep. Sara Innamorato and U.S. Rep. Summer Lee, co-conveners of the Pittsburgh Hospital Workers Task Force. e report examines UPMC's growth and consolidation over the last decade, noting its growth from a system of 12 hospitals to 40 that employs 92,000 people. Some central allegations made in the report: • UPMC controls three out of every four hospital jobs in Allegheny County. • UPMC's market concentration gives it "considerable power over workers, which it wields to keep wages low, conditions unsatisfactory, and prevent union organizing." • UPMC engages in union-busting. "Any worker who attempts to organize is surveilled, harassed, intimidated, and ultimately fired," the report alleges. • UPMC is understaffed, risks workers' safety and is "unwilling to ensure the workplace conditions necessary to prevent talented workers from leaving." • UPMC is "notorious for using its market power to acquire, and subsequently shut down, hospitals to reduce competition." e hospital names two hospitals — UPMC Pinnacle Lancaster and UPMC Susquehanna Sunbury — as examples. UPMC did not share comment on the contents of the report when reached by Becker's, but said "it appears to be based on the same flawed data and statistical analyses as other reports, which have been debunked." e report proposes an agenda for federal, state and local lawmakers to "reform" the healthcare industry in Western Pennsylvania, with recommendations to increase scrutiny of hospital mergers, ban the use of non-compete agreements, support hospital workers forming unions and investigate UPMC's tax-exempt status, among other actions. UPMC has previously faced scrutiny over its nonprofit status. In 2013, the city of Pittsburgh challenged UPMC's tax-exempt status, which spares the organization from property and payroll taxes. Aer a year- long dispute and pushback from UPMC, the city dropped its lawsuit challenging the system's status. n Consolidated health systems offer 'marginally better care at significantly higher costs': Study By Andrew Cass C onsolidated health systems have led to "marginally better care at significantly higher costs," according to a study published Jan. 24 in JAMA. The study was conducted by researchers from Boston- based Harvard Medical School and the National Bureau of Economic Research in Cambridge, Mass., according to a Jan. 24 Harvard Medical School news release. "One of the key arguments for hospital mergers and practice acquisition was that health systems would deliver better-value care for patients," the study's first author, Nancy Beaulieu, PhD, said in the release. "This study provides the most comprehensive evidence yet that this isn't happening." Dr. Beaulieu is a research associate in the department of healthcare policy in the Blavatnik Institute at Harvard Medical School. The researchers' analysis included 580 health systems of varying sizes, according to the study. Researchers assessed prices for physician and hospital services and total spending from 2018 commercial claims data. Outcomes were adjusted for patient characteristics and geographic area. Their findings suggested that patients whose primary care physicians are part of health systems, on average, received marginally better care and reported slightly better experiences with the healthcare delivery system, compared with patients whose primary care physicians are part of independent practices, according to the release. Prices for services from physicians and hospitals within health systems were significantly higher than their independent counterparts, according to the study. Physician services delivered within health systems cost between 12 percent and 26 percent more, compared with independent practices. System-based hospital services cost 31 percent more, on average, compared with care delivered by independent hospitals. Study author David Cutler, PhD, said that large health systems do have benefits over independent systems. "Big systems tend to be less vulnerable to economic downturns and they can provide specialized care that would be difficult to maintain in smaller systems," said Dr. Cutler, who is the Otto Eckstein Professor of Applied Economics at Harvard University. "But the hoped-for cost savings benefits of integrated health systems have not yet materialized." n

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