Aug. 02--The chairman of Greensburg-based Excela Health told state Senate committee members Wednesday that Highmark had threatened to "destroy" Excela if the three-hospital Westmoreland County health system did not play ball with the Pittsburgh insurer.
Jim Breisinger made his comments at a public hearing before the Senate majority policy committee regarding the impact of the apparent separation of UPMC and Highmark when their current contract expires in 2015.
The charges were disputed by Highmark, which said that it wants to be a partner to suburban hospitals and still hopes to cooperate with Excela, and noted that it had given Excela nearly $10 million in technology grants over the last two years.
Mr. Breisinger said Excela has tried to remain neutral in the conflict between UPMC and Highmark, as both are important to Excela and its patients. In prepared remarks, he said Excela had a good relationship with Highmark until the insurer announced plans to acquire the West Penn Allegheny Health System and build its own care provider network.
He said Highmark tried to acquire Excela, asked to become a partner in Excela's Irwin medical complex and wanted majority ownership in its network of 150 physicians. When Excela declined, he said, Highmark said that the insurer would buy or affiliate with all independent practices on Excela's staff and build nearby ambulatory centers.
"The threat was clear -- if Excela did not enter into an acquisition or affiliation with it, Highmark would use its monopoly position to destroy Excela."
He added that Highmark held a recruitment meeting for Excela's medical staff in March and recently got letters of intent to hire "15 to 20 of our medical staff members."
Although Excela is financially strong now, he continued, "the risk, however, is that one or both of these titans could use their monopolistic power to weaken Excela. If this were to happen, worst case, our friends and neighbors would be forced to leave Westmoreland County to receive care."
Highmark, in remarks delivered by Deborah Rice, executive vice president and president of health services, said that one of the insurer's priorities is to keep "care in the community," instead of sending cases into Pittsburgh for expensive hospitalization.
"Because of this focus, [we] have committed to local hospitals -- and this includes Excela -- that physicians aligning with Highmark will continue to extensively use the local facilities, so that patients receive care in the local community."
Highmark is still pursuing "joint opportunities" with Excela, but the two companies haven't reached any agreements yet, Ms. Rice said.
She also said that Highmark had no plans to poach physicians or change referral patterns in order to steer more customers to Highmark and West Penn Allegheny Health System. In fact, she said Highmark wants to steer customers back into their home counties, using branded insurance products designed to keep patients closer to home.
While Highmark claimed that some $300 million in medical spending leaves Westmoreland County each year, creating unnecessary cost and inefficiencies, UPMC countered with its own statistics.
"More than 90 percent of UPMC Health Plan subscribers outside Allegheny County don't go to UPMC hospitals. Instead, they use the hospitals in their local communities," said Marshall Webster, a vascular surgeon and an executive vice president with UPMC, in prepared remarks to the Senate Republicans.
He also said that systems like Excela would remain "vulnerable" to Highmark's new network.
"As Highmark converts itself from an insurer into an integrated health system, community hospitals are and will remain vulnerable to Highmark's aggressive efforts to move patients into its captive hospitals ... It is well known that this is an over-bedded region," he said.
UPMC's system operates about 60 percent of the general acute care beds in Allegheny County, a share that does not include the beds at its specialty hospitals.
Steve Twedt: firstname.lastname@example.org or 412-263-1963. Bill Toland: email@example.com or 412-263-2625.
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