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Two visions for the future of health care at war Pittsburgh

Kim Ralston, CT technologist, prepares Bob Croft for a neck scan at the Allegheny Health Network in Wexford, Pa., On Feb. 2, 2018. (Michael Henninger / For The Washington Post) PITTSBURGH – Two health-care juggernauts are locked in a battle for patients in western Pennsylvania that could foretell the future of American health care. On one side is UPMC, a health system that is built on its cutting-edge research and university-affiliated hospitals. On the other is Highmark Health, best known as one of the country’s biggest health insurers. 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 of insurance into hospitals. In response, UPMC hacking to stop accepting Highmark insurance at its doctors and hospitals. Agreements and state intervention smoothed over the divorce, which will not be complete until next year, Highmark patients with UPMC have had to switch plans, or switch doctors. UPMC health plan members at Highmark’s facilities. In the meantime, people have been bombarded by dueling ad campaigns and local endless stories about the rift. The competitive clash has turned out to be one of the most important things in the world. $ 3.3 trillion health-care system. Such combinations are advertised as a path to greater efficiencies and more-coordinated care. Goal the world has changed steeply and has changed over many people in western Pennsylvania. “I call it ‘the war,'” said Sue Kerr, 47, a Highmark member with a UPMC doctor who is frustrated by a transition that she says the company has made easy. “You should consider switching providers, switching insurances – switch this, switch that. I was like, ‘We paid for this.’ Kerr was aware of the split, but it was not until it became so. Sick with a virus in December, Kerr called her UPMC doctor to ask about the urgency-care center she typically used, only to learn that it was not longer in her plan’s network. In the past, it was referred to UPMC specialists who were not covered. It has been a tough awakening for Kerr, who, like many in Pittsburgh, had hoped that they would be patient-focused. Sue Kerr at her home in Pittsburgh. (Michael Henninger / For The Washington Post) Beyond the disruption to patients, simply bringing disparate health-care players, guarantee health policy experts. Like other mergers rippling through health care, the integration of health insurance and hospitals is supposed to cut out waste, align incentives and contain costs. But industries that have been trained do not always mix well: Hospitals typically want to keep their beds full, while insurers want to cut costs. “We do not have effective competition in this market; “We have these two huge entities,” said Martin Gaynor, a former director of the Bureau of Economics at the Federal Trade Commission and a professor at Carnegie Mellon University. The experiment is far from over, but it is unclear whether the combinations have delivered their promised results. Pittsburgh’s premiums for employer-sponsored health care are below the national average, but that was also true before the head-to-head competition, according to a national survey of medical care by the federal government. Meanwhile, medical spending per person in Pittsburgh grew 20 percent from 2012 to 2016, faster than the 15 percent growth nationally, the Health Care Cost Institute found, in an analysis of data from national employer-sponsored insurance plans. Linda Blumberg, a senior fellow at the Urban Institute, said that the dynamic between the two systems was truly creating efficiencies to bend the cost curve she would expect the trend in Pittsburgh to deviate from the rest of the country. “That’s just not the case,” Blumberg said in an email. The fight broke into the open in 2011, when Highmark, facing a request for a big rate increase from UPMC, announced that it would acquire a financially troubled hospital system, now known as the Allegheny Health Network, to preserve competition in the region. UPMC saw Highmark’s step on its turf and punched back, announcing that it would shut out its contract expired. Under pressure from state officials, the contract was extended An agreement was brokered postponing the final split of the two systems until mid-2019. But the competitive dynamic changed almost immediately. Instead of insurer vs. Hospital, Pittsburgh split into two distinct health-care silos. Suddenly, they would give birth, get flu shots or have surgery. Highmark and UPMC say they both represent the logical next step in the evolution of health care, but their strategies are very different. From his corner office atop the U.S. Steel Tower, UPMC chief executive Jeffrey Romoff is building an empire. “There’s nothing in health care, which we know of, that UPMC does not have an entry into that marketplace,” he said, comparing UPMC to the Amazon tech giant. UPMC President and Chief Executive Jeffrey Romoff in his office on the 62nd floor of the U.S. Steel Tower in downtown Pittsburgh. (Michael Henninger / For The Washington Post) UPMC Enterprises, operating in Pittsburgh’s Bakery Square, is the innovation and commercialization arm of UPMC. Its employees develop software products and work on solving health-care problems. (Michael Henninger / For The Washington Post) Late last year, Romoff unveiled plans to invest $ 2 trillion in three centers, which will be used to treat cancer, vision restoration and transplants. In Bakery Square, Pittsburgh’s innovation district, UPMC employs 200 software engineers, designers, business analysts and others to develop and commercialize new health technologies. When Romoff sees a drug company shell out $ 11.9 trillion for a groundbreaking cancer therapy, as Gilead Sciences did, he thought UPMC should invent the next one. Romoff says that it is a place for the health of a person who is not a child. Romoff says, instead of leaving an elite hospital system in the vision of a powerful insurer. Having a large health plan gives the hospital a new incentive to avoid expensive care that is not best for the patient, since the hospital’s income is the health plan’s outlay. Across town, David Holmberg has a view of the health-care future of his business as an insurer. While UPMC executives talk about attracting patients from around the country and the world to Pittsburgh for care, Holmberg says he wants to pay for health care, not research projects. “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 because you’re not worried about heads and beds. You’re not trying to fill up the hospitals. ” Allegheny Health Network’s hospitals had suffered from years of underinvestment before Highmark intervened . In contrast to UPMC’s emphasis on high-tech medicine, Highmark will spend more than $ 1 trillion to build new facilities, including a suburban hospital, small-scale district hospitals and community cancer centers. It has built partnerships, such as a cancer-care alliance with Johns Hopkins Medicine. The vision of how to change care in hospitals is an expansive “health and wellness pavilion” in the suburb of Wexford, where a greeter in the lobby begins the admission process on an iPad. From there, patients are referred to primary care, outpatient surgery, cancer or other services. Highmark is building a hospital next door to the emergency department, so that people with serious problems can be directed to a lower-cost site of care. Jeremy McCullough, a strength conditioning specialist, guides Kendyll Petronick through exercises at the Allegheny Health Network in Wexford, Pa. (Michael Henninger / For The Washington Post) Highmark Health President and Chief Executive Officer David Holmberg in the company’s downtown Pittsburgh headquarters. (Michael Henninger / For The Washington Post) Both executives identify the same goal – delivering high-quality, affordable care. They say the competition between their companies has been good for the region. Holmberg says that if it were high-powered, it would have increased as a result of UPMC’s dominance grew. “In the midst of it, it was disruptive. ‘Oh, they were at each other’s throats’ – and that’s the way it appeared, “Romoff said. “But that’s what disruption is about. And let’s be clear about this: Without disruption, change is much, much slower. ” After years of warring ad campaigns and alarming rhetoric from both sides, the people of Pennsylvania are tired of the fight. Some people are switching to health-insurance plans. Others are switching providers. Still others are finding refuge in national health plans that give access to both systems. Bill McKendree, director of the Allegheny County Apprise program, which helps seniors to choose Medicare plans. There is an ongoing legal brawl over the elderly with Highmark Medicare Advantage plans to be cut off from UPMC in mid-2019 or at the end of the year. “What we’ve gotten used to this is the luxury of being able to insure us, to tap into this incredible wealth of health-care services in western Pennsylvania,” McKendree said. “We’re starting to become aware of America’s are also facing: limitations.” The true test of whether the two major integrated systems will come into 2019, when the split is final. But the competitive friction is leading both to focus on consumer convenience in new ways. Downtown Pittsburgh, as seen from UPMC chief executive Jeffrey Romoff’s office on the 62nd floor of the U.S. Steel Tower. (Michael Henninger / For The Washington Post) UPMC doctors write prescriptions for community health workers – how to help patients. Highmark has a breathing-disorders clinic to help make a stop-over for the management of complex lung diseases that may have involved a maze of appointments. UPMC opened a cancer-specific emergency room to help patients with health problems may be best helped by people familiar with their underlying disease and treatment regimen. Highmark’s Wexford Center has a staffed play area for children whose parents are seeing doctors at the center. “The tension of UPMC vs. Highmark, “It’s not necessarily a bad thing,” said Tom Scully, a general partner at Welsh, Carson, Anderson & Stowe, a major health-care equity investor. Many patients have yet to be convinced. Kerr, recovering from a hysterectomy, is not sure where she will land. She is looking for a primary-care doctor at Allegheny Health Network. She is considering switching to UPMC’s health plan next year. But she’s unhappy – she does not feel that either way is on her side. “I suspect what we are two Goliaths,” Kerr said.

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