Now that Highmark Inc. is the owner of West Penn Allegheny Health System, giving the insurer the centerpiece it needed for its upstart health network -- and giving WPAHS some capital stability -- the practice-poaching that has long been a feature of the regional health care landscape could accelerate, physicians and industry experts say.
"Why don't they put in on TV, like they do the NFL draft?" joked Harvey Kart, publisher of Western Pennsylvania Healthcare News, a monthly industry journal. "We'll pick this place ... we'll pick that place."
Sounds like amazing television, but Highmark and UPMC would probably prefer to compete behind the scenes. Over the last decade, the results of that "competition" have been demonstratively lopsided in favor of UPMC.
In the three-month period ending Sept. 30, 2012, UPMC spent $25 million on new physicians and related expenses. In the period that ended Dec. 31, UPMC spent $39 million more on what it calls "increased physician investment." Some are from existing practices; others are younger residents, snapped up just a few years removed from medical school.
Highmark hopes to change the direction of that flow, and imminently.
There are "active recruitment efforts ongoing," Highmark CEO William Winkenwerder Jr., said Monday. And while there is a fine line between "poaching" and "active recruiting," Dr. Winkenwerder said he hopes to engage in the latter but prevent the former.
"There's no interest to hire to excess capacity just to remove a provider, a clinician, from one system to another," Dr. Winkenwerder said. Highmark will write provider contracts in a manner that won't "incentivize those kinds of actions," he said.
Often, that means some kind of noncompete clause built into a contract, preventing a physician from working in a particular geographic area for a year or more.
UPMC routinely does the same.
When Highmark grabbed an OB-GYN practice from UPMC's Magee-Womens Hospital last December, for example, several of the physicians who jumped ship were forced to work outside of Allegheny County.
But despite the proliferation on noncompete clauses, much of Highmark's Monday press conference -- called shortly after the state Department of Insurance announced its approval of the WPAHS purchase -- was directed toward local physicians who might like to work at WPAHS or Allegheny Health Network someday.
From the CEO on down, Highmark officials said the "closing" of the WPAHS deal will open the door for more physicians and specialists, particularly those from the city's No. 1 health network.
"We will look at the opportunities to grow services," said John Paul, head of the Allegheny Health Network and soon-to-be CEO to the WPAHS.
The purchase of WPAHS "will provide a very strong foundation and encourage physicians that there really is an alternative -- and this is a very viable alternative," he said.
And while there was some talk about recruiting nationally, many of the remarks were more geographically -- and professionally -- pointed.
"The feedback that we get from UPMC physicians is they want [a] voice" in how medicine is practiced, said Tony Farah, WPAHS's chief medical officer.
"They want to be able to control their clinical environments better than they have been."
The interest in Highmark's new health system, he said, has been high. Highmark has brought about 200 physicians on board in the past 18 months, and he has fielded inquiries from 1,000 more who are curious about employment options.
"The number of physicians from UPMC that would like to join us far outnumber the numbers that we need right now," Dr. Farah said. "That's a good thing, right?"
For one thing, they might just be fishing for raises. For another, West Penn Allegheny finds itself in a bit of a chicken-and-egg scenario -- right now, they have more capacity than they need, and more interest from physicians than open positions.
In other words, they don't have the customer traffic to warrant hundreds of new doctors.
But in order to generate more volume to its new system, Highmark will need to have more primary care physicians and productive specialty practices -- such as orthopedic clinics and OB-GYN units.
So they need new doctors to generate more traffic, and the traffic to generate more revenue.
A surgeon or specialist can bring in millions in hospital revenue a year, on top of his salary. Each primary care doc can bring in more than a million.
And that's why physicians can, in theory, leverage the two systems against each other.
When Triangle Urological Group was purchased by Highmark Inc. last month, sliding away from longtime partner Allegheny General Hospital and jilting would-be partner UPMC, nobody was standing in a breadline afterward.
Same goes for the folks at Metropolitan ENT Associates, the ear, nose and throat specialists who signed on with UPMC on Jan. 1, putting them out of WPAHS's reach.
But how many handsome pay raises can UPMC, WPAHS, Highmark and its newly named hospital group, called the Allegheny Health Network, afford to dole out?
The region will know the answer soon enough. And while that answer may be good for the up-for-grabs practices and the diminishing number of independent doctors, the mega-contracts also can leave a sour taste in the mouths of the loyal physicians and surgeons who want a similar deal -- but won't get it.
Paul Wood, spokesman for UPMC, suggests that WPAHS physicians get out while the getting's good.
"We're getting to a point where we're going to have enough physicians," he said. "Those who want to come had better come now."
UPMC's rapid growth in employed physicians can't and won't continue, he said. From October 2011 -- the month before Highmark launched its provider wing -- through today, UPMC has grown from 2,950 to 3,400 doctors, an increase of 450 physicians, or about 15 percent. By contrast, WPAHS has about 700 total physicians.
Though it's near the saturation point, UPMC still has its choice of top physicians and specialists, Mr. Wood said.
"We can pick and choose and successfully recruit pretty much any West Penn physician that we target. ... Almost all of UPMC's [physicians] continue to find the concept of leaving one of the nation's top 10 medical institutions to join a corrupt and perpetually mismanaged West Penn Allegheny nonsensical," he said. "Monday's announcement hasn't changed that at all."
While Highmark and WPAHS both said they hope to draw some doctors from outside the region, the fact is if they want an instant boost in patient traffic, they will need practices based locally with an existing customer base.
To achieve that, they'll have to target practices linked to UPMC and strengthen ties with independent practices and specialists.
And that might mean making them offers they can't refuse.
But even if the battle over local physicians might lead to some newly enriched doctors who are being paid well above the local scales, Mr. Kart said he's OK with that.
"When I have a heart attack, I want the doctor who's a multimillionaire," he said. "I want the superstar."
Bill Toland: email@example.com or 412-263-2625.