New Carrier Strategy?…..To Heck With Negotiating With Hospitals & Doctors, Just Buy Them Instead!

ownership“Today is a new day,” CEO William Winkenwerder said…….. It  (Highmark) shelled out about $1.6 billion to buy seven  hospitals, including the just-completed acquisition of St. Vincent Health System  in Erie, a number of doctor practices and other components……….
By  Alex  Nixon
Published: Wednesday, July 10, 2013,  12:01 a.m. Updated  8  hours ago
With the final piece of its new hospital network in  place, Highmark is gearing up to take on UPMC, Western Pennsylvania’s largest  health system.

It shelled out about $1.6 billion to buy seven  hospitals, including the just-completed acquisition of St. Vincent Health System  in Erie, a number of doctor practices and other components. But is its expansion  complete?

Spokesman Aaron Billger would only say that the  company, which also owns the state’s largest health insurer, will “work with the  community to determine health care needs and then develop capabilities to meet  those needs.”

Highmark has said it’s building the health system,  called Allegheny Health Network, to give its insurance customers a lower-cost  option to UPMC, the largest hospital network in Western Pennsylvania. In  addition to St. Vincent, Highmark has purchased the five-hospital West Penn  Allegheny Health System, Jefferson Regional Medical Center and Premier Medical  Associates, a large Monroeville physician practice. It also is building a $100  million outpatient center in Pine.

But more important to Highmark’s success than buying  hospitals and building outpatient clinics is whether it can achieve health-care  savings for its insurance members, said James McTiernan, a health-care  consultant with Triad Gallagher, a Downtown benefits consulting firm.

UPMC will become out-of-network for members of  Highmark’s insurance arm, Highmark Health Services, starting in 2015. Without  that access, members could drop the insurer. But they could be persuaded to stay  if Highmark’s insurance is less expensive than competitors with in-network  access to UPMC, McTiernan said.

“As a byproduct of success in the insurance business,  their health-care delivery (system) will do well because it will be feeding them  patients,” he said.

To raise the profile of Allegheny Health Network  among the general public, Highmark introduced a new advertising campaign on  Tuesday with the tagline, “Today is a new day,” CEO William Winkenwerder said  during a news conference in Erie.

“We have a great deal of work ahead of us,” he said.  “The long-term benefits to the community are substantial.”

UPMC has said it cannot continue reimbursement  contracts with Highmark Health Services beyond the end of 2014 because the  insurer intends to steer patients away from UPMC hospitals and doctors.

It has argued in its own advertising campaign that  Highmark’s plan to steer 40,000 UPMC patients to the Allegheny Health Network  would cause it substantial financial harm.

Alex Nixon is a staff writer for Trib Total  Media. He can be reached at 412-320-7928 or anixon@tribweb.com

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