The Right Rx?

For Lancaster County, a series of proposed hospital deals announced Tuesday could be a game-changer.

The deals would have Harrisburg-based PinnacleHealth System buy four hospitals owned by for-profit chain Community Health Systems Inc.

They include Lancaster Regional Medical Center and Heart of Lancaster Regional Medical Center here, as well as Carlisle Regional Medical Center in Cumberland County and Memorial Hospital in York County.

Then, PinnacleHealth would affiliate with University of Pittsburgh Medical Center.

Both proposals would need to obtain regulatory approval, and the UPMC deal also would need to get a final OK from UPMC and PinnacleHealth.

Here are key things to know about how the deals could affect people locally.

Will the organizations say more about their plans?

Not yet. PinnacleHealth, Heart and Regional responded to questions Wednesday with emails declining comment beyond the statements issued Tuesday.

"We will keep our stakeholders and community updated as there are developments to share," PinnacleHealth spokeswoman Kelly McCall wrote.

Will there be any changes in location, leadership, staffing levels or services offered here?

As LNP reported Wednesday, PinnacleHealth has committed to offer employment to all Heart and Regional employees in good standing when the transaction is complete.

"Are there jobs implications here? Are there implications to their physical plant? Those are the short-term questions," said Lisa Riggs, president of the Economic Development Co. of Lancaster County.

She also wants to know about involvement here.

"Are there leaders who live here, whose kids go to the local schools?" she said.

Joe Lupica, chairman of Arizona-based Newpoint Healthcare Advisors, said he has been watching developments here with interest and that he believes the proposals would make health care more local by uniting the four scattered Community Health Systems hospitals into a regional hub and shifting ownership from Tennessee to Pennsylvania.

What share of the local health care market does Heart and Regional have now?

The latest figures from the Pennsylvania Health Care Cost Containment Council show that of all Lancaster County residents admitted to hospitals, 12.1 percent go to those two, compared to 56.4 percent to Lancaster General Hospital, 11.6 percent to WellSpan Ephrata Community Hospital and 5.6 to PennState Milton S. Hershey Medical Center.

PinnacleHealth is down the list a couple of steps, at 0.6 percent.

How would the plan affect cost and competition levels here?

Although organizations seeking to merge argue that consolidation will yield savings through economies of scale, studies repeatedly have shown that health care consolidation tends to result in higher costs.

However, some health care experts said the proposal could increase competition, through the hospital side or the insurance side or both.

Lupica said Heart and Regional have struggled, and UPMC coming in on their side to face off against dominant LGH/ Penn Medicine would be an "uplift" for them.

He noted that as an insurer, UPMC has a built-in incentive to keep costs low.

"If the health plan comes in and really tries to compete by reducing the cost of the premiums, I think that consumers will benefit," he said.

Eric Weis is an East Hempfield Township resident retired from a health care career that included stints at The Heart Group in Lancaster and what is now PinnacleHealth.

"I think UPMC is doing this for the insurance market," he said, noting that he doesn't expect many patients would want to make the trek from Lancaster to western Pennsylvania when they need high-level care.

But, he said, UPMC and Highmark have been competing fiercely on insurance, and the proposal would open another front in that war.

However, he said, even if UPMC had its own hospitals in the region, he doesn't think it could find a market for insurance that didn't include Lancaster General Hospital or WellSpan Ephrata Community Hospital.

Stephen Foreman is an associate professor of economics and health administration at Robert Morris University in Pittsburgh who knows the market here because he lived in the Harrisburg area for a while.

Increased competition doesn't always lower costs, he said, noting that sometimes it spurs the introduction of new services.

"It's possible that there's a market strategy there," he said. "It might be a whole lot cheaper to provide some standard community hospital services there than at Lancaster General; there might be a way for them to really market that."

Diane Hess, executive director for the nonprofit Central Penn Business Group on Health, said in an email that she sees the proposal as "an opportunity to bring wider efficiencies to our local market" that "may well serve to introduce additional price competition."

Currently, she noted, the cost of insurance on healthcare.gov is higher here than in the Pittsburgh region.

How would Highmark plans be affected?

Highmark spokesman Leilyn Perri noted in an email that in several previous UMPC affiliations, the state required that UPMC contract with other health plans including Highmark.

"No one wants to place the consumer in the middle, and we expect continued access to Pinnacle for our members," he said.

Highmark currently has a plan that offers members a big incentive to seek care at PinnacleHealth or PennState Milton S. Hershey Medical Center by cutting out-of-pocket costs by nearly two-thirds.

Perri said all plans are evaluated yearly, and he does not expect those terms would extend to Heart and Regional if they became part of PinnacleHealth.

How do PinnacleHealth and UPMC compare to health systems currently in Lancaster?

Philadelphia-based Penn Medicine has five hospitals including the county's largest, Lancaster General, and operating revenue of $6.4 billion.

York-based WellSpan Health has six hospitals including WellSpan Ephrata Community Hospital, with revenue of $1.9 billion.

PinnacleHealth has three hospitals in Dauphin and Cumberland counties, with revenue of $1.06 billion.

UPMC has more than 25 hospitals, mostly in western Pennsylvania, with revenue of more than $12 billion. It's also the largest medical and behavioral health insurer in western Pennsylvania, with more than three million members.

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