Call and Response - hearings continue, legislative proposals emerge

This is what democracy looks like...


State legislators have heard the call from businesses, citizens and stakeholders. There have been hundreds of letters to the editor. Local media is providing consistent coverage and dissecting UPMC vs Highmark from every angle. As of this week a former Secretary of the U.S. Treasury weighed in candidly. Yet and still, the battle continues.


Apparently, the entire nation is watching. According to the stats on this blog people in Indonesia, England and Russia are tuning in. So its safe to say that "the whole world is watching."


Yesterday, the Pennsylvania House Insurance Committee held a hearing in Harrisburg regarding UPMC vs Highmark, with members of both houses in attendance. Here are some of the highlights:

"If you tell us there's nothing you can do to UPMC, you either have to get out of your job or you need to tell us what piece of legislation we have to pass," Mr. Barbin, D-Cambria, said during the hearing...

"UPMC won't listen, so now it's time for legislators to take charge," state Rep. Tony DeLuca, D-Penn Hills, said after the hearing...

"I don't know how you can force two commercial entities into a contract that they don't want to enter into," UPMC spokesman Paul Wood said in a telephone interview. "How do you force two competitors into a contract?"

[Senator] Costa said lawmakers are reluctant to intervene in disputes between private businesses but that this is an exception.... "This is one of those times where we need to take legislative action," he said after the hearing. "It's not our practice to stick our nose into private business, but, at the end of the day, this issue rises above that concern."

Rep. Dan Frankel, D-Squirrel Hill, said... "I understand they want to build a strong, successful business, but they seem to forget that this is not Wall Street and they're not selling televisions or cameras or iPads; they're providing vital health care for our community..." (PG - Tracie Mauriello)

State officials in the Legislature and Executive administration are digging deeper into UPMC vs. Highmark. So far the resulting solutions from Rep. Frankel and Rep. DeLuca each have over 60 bi-partisan co-sponsors. I expect additional proposals to emerge during the coming months, as well as in the 2012 Legislative Session.


Last week, I had the pleasure to speak with Sally Kalson from the PG about UPMC vs. Highmark. Her column has been a progressive mainstay for decades, and I was happy to share my perspective on the policy implications of UPMC vs. Highmark. After briefly discussing the issue with broad brush strokes, we discussed cost containment, access, and a variety of policy approaches

In the senator's view, the scenario has two parts -- the "nasty divorce" period, when consumer-hostages will have to be protected, and the long run, when government bodies will have to exercise their powers to maintain patient access and a level playing field...

"The Legislature created UPMC and Highmark. They exist because of the charitable trust exemptions granted in state law. We [legislators] should weigh in and guarantee that UPMC cannot exclude Highmark subscribers from their physician network during the divorce..."

The Pennsylvania Supreme Court set [Act 55] standards in a 1985 ruling. To qualify [as a charitable organization], an organization must (1) advance a charitable purpose; (2) donate a substantial portion of its services; (3) benefit a substantial class of people who are legitimate subjects of charity; (4) relieve government of some of its burden; and (5) operate entirely free from private profit motive....

... The Legislature should revive the "certificate of need" requirement that once put the brakes on overbuilding and costly health care redundancies. Hospitals had to show a demonstrated need in the community -- empire-building did not qualify -- before sinking millions into, say, a competing facility in Monroeville...

"We used to have a Health Systems Agency doing that oversight," Mr. Ferlo said. "It was so effective it was disbanded, and then costs went through the roof. We need to get back to that principle...." (PG)

In summary, there is the short-term need to prevent the "divorce," or at the very least to facilitate a smooth breakup. Thinking long-term, UPMC vs. Highmark is symptomatic of a Western PA regional health care and health insurance market that is broken, and can only be fixed through statutory remedies. A few of these remedies include reforming Act 55, enacting Certificate of Need legislation, and effectively implementing ACA provisions (new requirements for insurance rate increases and tax-exempt hospitals in particular).

In the end, improved Medicare for all is the only real solution to this crisis. I will continue to keep this end in sight as we search for remedies to UPMC vs. Highmark. 


jferlo