Economics / Health

Healthcare competition thickens in Central Pa.

The recent merger of the University of Pittsburgh Medical Center and PinnacleHealth may mean that Penn State will have to step up.

The University of Pittsburgh Medical Center keeps growing. (Photo by Flickr user Governor Tom Wolf, used under a Creative Commons license)
This story is part of Grow PA, a reported series on economic development across 10 Pennsylvania counties underwritten by the Chamber of Commerce for Greater Philadelphia. Sign up for our weekly curated email here.
Regulatory approvals were given the green light for University of Pittsburgh Medical Center and PinnacleHealth to join forces last week, becoming UPMC Pinnacle. But what does that mean for those in Central Pennsylvania?

Danielle Gilmore, public relations manager, PinnacleHealth, Lancaster Regional Medical Center and Heart of Lancaster Regional Medical Center, called it a milestone via email.

“PinnacleHealth System and UPMC have reached another milestone in our efforts to align by signing a binding integration and affiliation agreement,” she said.

This consolidation comes less than a year after the Federal Trade Commission put a halt to a merger between PinnacleHealth System and Penn State Hershey Medical Center, saying it “would substantially reduce competition” for inpatient hospital services in the Harrisburg region.

The FTC was looking to prevent “reduced quality and higher health care [sic] costs for the area’s employers and residents.”

Shaun Donovan, Economic Development Specialist for the Capital Region Economic Development Corporation (CREDC) said he is not sure much is going to change as a result of this. However, it does mean Penn State Hershey is left as a standalone.

“We know from Penn State, it’s going to be a challenge for them to compete,” Donovan said. “UPMC’s footprint is so large now and Pinnacle is everywhere. It’s going to take them some time to catch up.”

And in regards to competition, Donovan said, “In our network, we’re still left with one major hospital system.” So, operating from that perspective, there isn’t change. The formerly PinnacleHealth has just acquired four more hospitals. “So it’s a system,” he added.

Other networks are feeling some sort of push from this merger, though.

“It has caused some investment in other hospitals outside of [UPMC Pinnacle’s] network,” Donovan said. “Geisinger just completed a brand-new trauma center, bringing a trauma center to the west side.”

One positive aspect of the merger will be the strengthening of weaker hospitals. An opportunity that, Donovan said, would not have been possible without UPMC’s support. He said it’s critical to the region’s healthcare system and for those hospitals not in the city core.

In a press release, UPMC Pinnacle Chief Medical Officer Christian Caicedo, MD, said this was a part of the goal.

“Our affiliation with UPMC will allow us to build on our healthcare leadership in the region, and continue to bring new tools and services to area residents, as well as attract leading doctors to central Pennsylvania.”

Caicedo went on to add that both organizations are already leaders in providing clinical trials in their respective regions. She said collectively they can increase patient access to those as well as experimental therapies.

Aside from the benefits to hospitals, patients may be concerned what this means for themselves. PinnacleHealth’s press release said this agreement does not affect patient’s care or insurance coverage. UPMC Pinnacle “will continue to honor the contracts it has in place with regional insurers.”

Highmark members in central Pennsylvania are also safe. They will continue to have access to care under a long-term contract extension signed by Highmark Blue Shield and PinnacleHealth in August.

Donovan said that unlike other UPMC mergers, Pinnacle is going to be able to maintain some autonomy. They will not be putting insurance blocks in place.

As UPMC continues to expand, the quality it has come to be known for will be maintained by a Board of Directors. UPMC Pinnacle promises local governance will continue under the 12 “Pinnacle-designated” volunteer business and community members along with six newly appointed UPMC members.

“The UPMC Pinnacle Board will be responsible for central Pennsylvania operations including quality of care, access to care, insurance contracts, medical staff development and growth initiatives,” according to a press release.

A press conference and formal celebration are set for Sept. 11.


Series: Grow PA

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