The Problems With UPMC

On January 19, 2023, the American Economic Liberties Project[1] released the report “Critical Condition: How UPMC’s Monopoly Power Harms Workers and Patients” (the “Report”). The Report addresses the problems with UPMC and the consequences to its workers and patients.

According to the Report, “[i]n the last ten years alone, UPMC used a relentless string of acquisitions and construction of new facilities to grow from a system of 12 hospitals into a network of 40 hospitals with 8,800 licensed beds, an insurance network that covers more than 4 million people and to become the employer of 92,000 workers.” It controls 67% of all hospital employees and 60% of all licensed hospital beds in Allegheny County and 76% of all hospital employees in Pittsburgh and 71% of all licensed hospital beds.

The Report states that “UPMC has been party to more than 150 unfair labor practice filings at the National Labor Relations Board since Pittsburgh hospital workers started organizing a decade ago, and the NLRP ruled in 2014 and again in 2018 that UPMC broke federal labor law by attempting to prevent workers from forming a union.”

As an insurer, UPMC controls 17.5% of the health insurance market in Pennsylvania and 32% in Western Pennsylvania, leading to a reduction in competition.

The Report outlines the following consequences:

Creating a health care system with too few workers, misappropriated resources, and ultimately, the inability to provide the standard of care, the community benefits, or the sort of workplace that Pennsylvanians demand and deserve. Like the steel corporations of the last century, UPMC has used its power to depress wages, degrade working conditions, extract money from the public, and ultimately, create a crisis for the communities in which it operates and in which we live.

The Report calls for the following action:

  • Support from public officials for the formation of a union;
  • Reintroduction of competition into Western Pennsylvania’s healthcare market;
  • Pass the Pennsylvania Open Markets Act as a model piece of state antitrust legislation (Pennsylvania currently does not have a state antitrust statute);
  • Increase enforcement of monopsony power causing suppression of wages, degrading working conditions, and poor benefits;
  • Ban use of non-compete agreements;
  • Revisit UPMC’s tax-exempt status; and
  • Adopt “Any Willing Insurer” legislation, which would require UPMC to accept any registered insurer desiring to contract with it.

This Report has gotten the attention of two Pennsylvania lawmakers – State Rep. Sara Innamorato and U.S. Rep. Summer Lee. It is yet to be seen how the Pennsylvania and U. ( S. legislators will act on this Report. The Report raises issues with UPMC, but this is a problem across the nation with other large hospital systems.

[1] The American Economic Liberties Project was “launched in February 2020 to help translate the intellectual victories of the anti-monopoly movement into momentum towards concrete, wide-ranging policy changes that begin to address today’s crisis of concentrated economic power.”