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May 13, 1999



At a recent University event Jeffrey Romoff, president of UPMC Health System, came by to greet and tease me. He said, in essence, that he must be doing things all wrong because I had not criticized him for at least six months. I replied that I hadn't noted any wrongdoing and reminded him that I had sent him a letter last fall, praising his excellent presentation in the Health Policy Institute's lecture series. His analysis of the current health care environment in western Pennsylvania was thoughtful and provocative. It is unfortunate that he does not permit his presentations to be taped. Many who believe they are experts on health care and were not present at Jeff's talk could have learned a great deal.

Further thoughts about this encounter with Jeff directed my attention to the struggle between UPMC Health System and Highmark Blue Cross/Blue Shield and its allies. It is widely believed that the conflict between these two health care giants is costly and harmful to the public. While competition generally is viewed favorably in our society, competition in health care, particularly locally, is looked on with suspicion by those who believe that cooperation in health care better serves the public.

I have no particular personal stake in the outcome of the struggle between Highmark and UPMCHS. A good many individuals involved in the management of both Highmark and its soon to be affiliated institutions, and UPMCHS and its member entities, are graduates of the Graduate School of Public Health's Health Administration program, whom I have had as students in class. As a consumer of health services and as an employee of the University, I have, as current common parlance puts it, "a dog in that fight," as do other faculty and employees, and to some extent students, and I would like to explain why.

First, University employees want ready access to health services, a wide choice of providers from which to receive services, and level, or at worst modestly increasing, health insurance costs. This year Pitt decided that any increase in the cost of health benefits should be borne solely by the employees, and it may take that position routinely in the future.

Second, many School of Medicine faculty clinicians are now, by virtue of arrangements between the University and UPMCHS, clearly dependent upon the University of Pittsburgh Physicians, a subsidiary of UPMCHS, for a substantial portion of their compensation. These medical school faculty have a stake in the continued success of UPMCHS, in order to gain access to patients and to generate revenue for their departments and, ultimately, themselves. If Highmark were to dominate regional health care, through its alliance with the remnants of AHERF and the Western Pennsylvania Hospital, opportunities for revenue generation by medical school faculty might well decline, and they would suffer financially. Faculty, including some essential to the medical school's teaching program, might leave.

Third, last year Pitt and UPMCHS announced a UPMCHS commitment to provide $1 billion to the University over the course of 10 years. Details were lacking, and efforts by faculty representatives through University Senate committees to see the agreements embodying this commitment have not met with success so far. We have, nevertheless, learned something about the financial commitment. A major part of it consists of compensation to medical school clinical faculty and their departments for services rendered to patients and for fulfilling administrative responsibilities at UPMCHS institutions. However, UPMCHS also has committed to provide funds to the senior vice chancellor for Health Sciences, to be used for Pitt academic projects. My guess is that there is no legally binding commitment for $1 billion over 10 years from UPMCHS to the University; that amount may be a goal or an expectation. As members of the Pitt community, faculty and other employees, apart from the medical school, have a stake in the success of UPMCHS, so that this commitment can be met. Some of that money might be spent in support of activities and programs that involve both schools in the senior vice chancellor's domain and other schools of the University, although one should anticipate that UPMCHS may require certain commitments when it makes funds available for such endeavors.

This strongly indicates that Pitt faculty, staff and students have a stake in the continued success of UPMCHS. I believe that both Highmark and UPMCHS will be around, and in conflict or competition, for quite some time. My hope is that they can find ways to avoid needless duplication and to cooperate in areas, such as improving the quality of health services rendered in western Pennsylvania and the health of its population, where cooperation can serve the public, while competing in other areas, such as reducing costs, in ways that do not harm the public. If one were to appear close to gaining irreversible dominance in the region, there would probably be a regulatory response from Harrisburg that would do more harm than good.

Jeff Romoff should not fear that, if I don't criticize him, he must be doing something wrong. Rather, based on his talk last fall, he, far better than I, recognizes when the choice can and should be made in the public's interest between cooperation and competition. Perhaps he can get his peers at Highmark and its new partners to agree to rules of engagement that leave the public injury-free.

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