UPMC, Heritage Valley fight for patients
Heritage Valley Health System may be forgiven for feeling a bit crowded after UPMC cut the ribbon on an outpatient center in Edgeworth on Friday.
The new UPMC Primary and Specialty Care office is in the same block of Hazel Lane as a four-physician primary care office and urgent care clinic owned by Heritage Valley.
And while patients benefit by having more doctors to choose with the addition of the new UPMC offices, ramped up competition among health care providers can result in a grinding war of attrition where the winner isn’t known for years.
The new UPMC Edgeworth
offices offer “convenient access” to the health system’s hospital in McCandless, a half-hour away, according to a system news release, complementing UPMC Children’s Community Pediatrics, which opened an office there in November. Not mentioned was HVHS’s 186bed Sewickley hospital, which is 1.1 miles away.
“The really nice thing about it is that we have wraparound services with UPMC Children’s and Magee Womens hospitals,” UPMC Hospitals President Mark Sevco said at the ribbon-cutting. “The model is really to provide customized, tailored and personalized care for patients in a location that’s very close to home.”
Heritage Valley Health System CEO Norm Mitry said the competition reflects the retailing enterprise that health care has become.
“Similar to where you see a McDonald’s, you see a Wendy’s or Burger King,” he said in a statement. “Where you see an Advanced Auto Parts, you see an AutoZone. Now, you are seeing competitive health care facilities on opposite street corners.”
Tit- for- tat competition among health care providers is nothing new.
Armstrong County Memorial Hospital in Kittanning was miffed several years ago when rival Butler Health System opened an urgent care center less than 2 miles from the Armstrong hospital. And in 2019, Allegheny Health Network opened a $20 million cancer treatment center just 6 miles from a cancer care center jointly operated by HVHS and UPMC.
The Connellsville community in Fayette County is watching three different health systems — WVU Medicine out of Morgantown, W. Va.; Penn Highlands Healthcare of Clearfield County and Excela Health from Westmoreland County — all invest dollars in new operations there.
Economists say that such duplication of services can drive up the overall cost of health care by creating the mandate to fill physician appointment books and hospital beds, risking overuse of medical resources. Having three burger joints on the same corner is not the same thing as four rival AHN and UPMC hospitals in three nearby municipalities.
Unlike the burger wars, health insurance premiums from individuals and businesses underwrite hospital battles, experts say.
The shoulder bumping now happening in Edgeworth has another layer that makes it interesting. HVHS and UPMC are medical frenemies, which differentiates them from the rivalries of other health care systems, while complicating each system’s bid to attract patients as COVID-19 stresses their ledgers.
In addition to partnering to provide cancer care, UPMC affiliate Western Psychiatric Institute and Clinic has managed HVHS’s behavioral health services for many years, including Staunton Clinic, which also has offices on Hazel Lane.
Moreover, 24% of Heritage Valley Health System’s net patient revenue came from patients who were insured by UPMC health plans in fiscal 2020 — the year HVHS recorded a $50 million loss from operations, a key metric of fiscal health for medical institutions. A year later, the operational loss was pared to $25 million.
By comparison, operating income at the 40-hospital, $23 billion UPMC more than doubled to $798 million for the first nine months of 2021, leaving the health care goliath far better positioned to absorb the losses necessary to take market share.
The size difference hasn’t stopped HVHS from fighting back.
In 2010, UPMC opened an urgent care center in Robinson, part of HVHS’s historic service area. Heritage Valley Health System opened an urgent care center of its own a mile away from the UPMC clinic in 2018.
In his statement on Friday, HVHS’s Mr. Mitry worried about intensifying competition in a part of the state that’s losing population.
“During the COVID-19 pandemic, health care competition took a backseat to collaboration,” he wrote. “Unfortunately, competition is now back in the front seat, with all organizations trying to serve a declining Western Pennsylvania population.”