Why did Highmark acquire West Penn Allegheny Health System and then form the Allegheny Health Network?
One of the reasons, according to Highmark back in early 2011, was to ensure an alternative health system was available in the region, to hedge against a UPMC monopoly by propping up the struggling WPAHS.
So, today the stage is set for competition. Highmark is funding that alternative health system. In a free market, the superior product and service at the right price usually wins. But Highmark doesn’t seem to want to compete on its ability to provide quality health care at affordable costs through its provider arm. It wants to have its cake and eat it, too. Highmark wants a contract with UPMC, and it seems most people in the region believe UPMC, a nonprofit built with taxpayer money, should contract with Highmark.
Pennsylvania Reps. Jim Christiana, a Republican, and Dan Frankel, a Democrat, believe that. They’ve introduced legislation that would essentially force UPMC hospitals and doctors to accept patients who carry Highmark health insurance at in-network rates.
I understand the nonprofit argument. Taxpayer-built institutions should be available to the taxpayers. But I am not in favor of government mandating that organizations – even nonprofits – do business with one another. Some say UPMC and Highmark need each other. If that’s the case, they’ll come together. If not, let the competition play out.
A few weeks ago, UPMC, the region’s largest health network, sent a mailer to Christiana’s constituents to oppose his co-sponsored legislation that would require hospitals operating as part of a integrated delivery network to contract with any willing insurer.
In an opinion piece written in October, Christiana and Frankel talked about the need for government to “set some rules.” They’re “unsettled” that health system and insurer executives look at patients as “‘market share’ – that’s you and me and our neighbors when we get sick.”
With reimbursement squeezed to the point where a 24-hour admittance to the hospital isn’t necessarily categorized as inpatient and therefore insurers can pay much less to the provider, hospitals must do everything they can to survive. And that includes consolidate and buy physician practices. Its fantasy to believe that hospitals can be run in any other than with a business mindset. The business just so happens to be the provision of health care. The times are changing, and so is health care.
Their opinion piece provided some details about how their bi-partisan legislation would ensure full access and true competition, resulting in the “highest-quality, highest-value health care networks.”
They talked about “tiered” health plans that pass on savings in the form of lower co-pays and premiums when patients choose low-cost providers. They wrote:
“Right now we’re charged the same amount whether we go to a hospital that bills our insurance company $300 or $3,000. A good tiered product could allow us to pay less out of pocket up front if we choose doctors or hospitals that bill our insurance companies less. Insurance companies would pass the savings along to us. If we wanted to go to a higher-cost hospital, we could still do so and pay a little more.”
That’s an excellent point, and the very one on which Highmark should be working diligently every day. How do you beat UPMC? Offer an equal or better product (i.e., high quality health care) at a lower cost. Then all the Highmark members can in good confidence get all their health care from the Highmark-owned Allegheny Health Network.
A major problem with that is this: patients don’t know what procedures cost, and very little meaningful quality data exist. Health care is still largely opaque, not transparent.
In today’s healthcare marketing arena, tired logos, taglines and jingles permeate brochures, billboards, websites and television spots. Unfortunately, none of these worn tactics tell a cohesive story or demonstrate how a specific community benefits from its hospital’s services, and none of them carry much, if any, credibility. Unlike a brand, a healthcare system’s story — complete with a beginning, middle and end — can provide a more robust, contextual, authentic framework in which to engage stakeholders, from patients to the IRS.
The institution’s story enables its leaders to showcase the true value of what they do in ways that do not have to be shoehorned into oversimplified brand “hooks,” tag lines or other premises.
In the 21st century digital age of transparency, patients are asking why they should get their care there, beyond the standard marketing claims about the region’s greatest heart care or orthopedics team, or the most advanced women’s health center, or the speediest emergency room. They go online to rate doctors, nurses and hospital systems. Their deep conversations about the value of a health care institution have nothing to do with the tagline or traditional branding tactics such as logos and colors.
This is what both health systems should be doing to win patients.
Frankel and Christiana are not advocating for a competitive market. They’re advocating for a government-regulated market. Rather than meddling in the free market, consider legislation that enhances free market principles. Force cost and quality transparency, and incentivize the consumer to choose the best product. After all, isn’t that what competition really is?
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Jason Snyder is a senior vice president for WordWrite Communications.
