Allegheny County to stay with Highmark for health insurance

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Allegheny County Executive Rich Fitzgerald fired a shot across UPMC's bow on Tuesday, saying the county's 15,000 employees and dependents would be keeping their Highmark insurance, even if UPMC cuts off access to Highmark customers at the end of this year.

Even so, Mr. Fitzgerald says he wants an agreement between the two Pittsburgh health titans that would give Highmark customers full access to UPMC hospitals and physicians, and on Tuesday he tried to encourage movement in that direction with his announcement that Highmark would be the county's exclusive insurance provider through at least 2015.

"We're sending a signal of what we hope they do," Mr. Fitzgerald said. "We've got to make sure people are willing to sit down and negotiate."

In picking sides with Highmark, he said he hopes his "signal" will spur other businesses and organizations to take similar action, to force UPMC's hand. Mr. Fitzgerald made the announcement while former county executive and current Highmark executive Dan Onorato looked on; Mr. Fitzgerald's political cohort, new Pittsburgh Mayor Bill Peduto, has also waded into the UPMC-Highmark fray, meeting with UPMC CEO Jeffrey Romoff last month to discuss the ongoing feud and UPMC's property tax exemptions.

The 6,700 county employees have been on the Highmark plan since January 2013, after a competitive process in which Highmark beat out UPMC Health Plan and Aetna.

That contract covers the period until 2016, Mr. Fitzgerald said, and will save the county $10 million in premiums and administrative costs in 2014 and 2015.

Like many multi-year health carrier contracts, this one had an escape hatch built into it that would have allowed the county to renegotiate terms, offer other carriers, or otherwise amend the contract partway through the deal, given the region's ever-changing health care landscape. But with the Tuesday announcement, the county essentially is committing to Highmark for the final 20 months of the deal.

"We've got to keep the costs down for the taxpayers," he said. "We thought Highmark had the best value for both our employees and the taxpayers."

There are about 15,000 people -- employees and their dependents -- on the plan, and Highmark has been the county's insurer since 2005.

Paul Wood, a spokesman for UPMC, declined comment.

The county's stance differs from the one taken by the City of Pittsburgh, which announced last year that it would, for the first time since 2008, be offering a choice of two health carriers -- Highmark and Aetna's HealthAmerica -- to the city's 3,400 employees and their 4,500 dependents. When the city announced that contract, UPMC said the multi-carrier arrangement was a big deal, and a harbinger of how other large employers would handle the rift between the two warring organizations.

Not everyone is pleased with the county's stance. Joseph Rossi, president of Teamsters Local 249, which covers about 600 county employees, said Highmark is a good product, but the potential exclusivity raises concerns that his members would not have access to some of UPMC's specialty care services, like Magee-Womens Hospital.

But, he continued, "There's not a lot we can do about it."

Neal Bisno, the president of SEIU Healthcare PA -- which represents about 1,000 county employees and is seeking to organize UPMC nurses and technicians -- praised Mr. Fitzgerald's announcement as "a major step forward. ... It's time for UPMC, which as a tax-exempt charity is bound to serve the needs of the community, to enter negotiations for a new contract."

Although he also has concerns about members' options for care being limited, Mr. Bisno said he believes Mr. Fitzgerald's action will encourage UPMC to negotiate with Highmark.

The contract between Highmark and UPMC expires at the end of the year, meaning that next year people with Highmark coverage will lose in-network access to most Pittsburgh-area UPMC facilities, with the exception of Children's Hospital and Western Psychiatric Institute and Clinic.

Paula Reed Ward:, 412-263-2620 or on Twitter @PaulaReedWard. First Published April 15, 2014 12:02 PM

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