Highmark works to boost presence in the North Hills
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If the clear front line of the war between UPMC and Highmark is in Monroeville, where the new UPMC East is hoping to divert patients from the Highmark-affiliated Forbes Regional Hospital, there's a less obvious side skirmish developing in the North Hills.
Insurer Highmark Inc. -- which could divorce UPMC's health network by 2015, meaning its customers would lose in-network access to UPMC doctors and hospitals -- has covered its flank to the west, the south and the east of Pittsburgh.
But the northern part of Allegheny County is UPMC territory, and Highmark customers who live there would -- come 2015 -- have reduced hospital and clinic options if Highmark and UPMC do eventually separate.
It's a geographic doughnut hole that must be filled in 28 months, which is why Highmark has purchased properties in Cranberry, Pine and Ross, with the presumed intention of building outpatient medical clinics on those sites.
Highmark-affiliated Allegheny General Hospital also owns a large, undeveloped plot of land in Ohio Township at Lowries Run Road.
The outpatient clinics -- sometimes being called "medical malls," in that they will offer several medical, surgical and diagnostic services at the same site, and perhaps one-night beds -- are meant to make up for Highmark's lack of hospital presence in the northern suburbs, where UPMC dominates and has hospitals in Cranberry and McCandless.
WPAHS, on the other hand, has been without a full hospital presence in the I-279 corridor since the AGH Suburban campus in Bellevue converted from an acute care hospital to an outpatient clinic. Reopening Suburban's emergency room and inpatient beds could also be an option for Highmark, and it's something Highmark and WPAHS leadership say they may investigate.
"It's really a giant hole," said Pittsburgh health benefits consultant Jim McTiernan of Triad USA. "It's a problem that's going to need to be addressed. ... If you look at any other community, there will be access to a non-UPMC facility for most people. In the North Hills, there won't be."
And given that the North Hills -- and southern Butler County -- have been among the region's fastest-developing areas over the last decade, Highmark's need for "patient intake" in that area will be all the more pressing, said Tom Tomczyk, principal at Buck Consultants' health and productivity group.
"Just look at the population in the North Hills and how it continues to grow," particularly with the addition of Westinghouse Electric's new Cranberry campus, he said.
In adding outpatient clinics to the region, Highmark is trying to perform a balancing act: The Pittsburgh region, many experts believe, has too much capacity, too much utilization and too many hospital beds. Adding to that capacity -- buying land and building new clinics and "malls" -- adds expense to the local system at a time when the focus is on trying to drive health care expenses down.
"All the emphasis is on staying out of the hospital and being well," Mr. Tomczyk said.
Even so, Highmark's North Hills customers need to be reassured that if they stay with Highmark after 2014, they'll still have a competitive, geographically diverse provider menu, while the insurer's affiliated hospitals and their in-house specialists need to be reassured that they'll continue to have patients.
Highmark declined to comment on its North Hills plans.
"Allegheny General Hospital is a Goliath," said Jan Jennings, CEO at consulting firm American Healthcare Solutions in Pittsburgh. "It needs a big feeder system, [which] currently does not exist. Doing something smart in the North Hills makes a lot of sense."
Highmark is now in the process of acquiring the West Penn Allegheny Hospital System, which would give Highmark customers access to WPAHS hospitals in the North Side, Bloomfield, Monroeville, Washington County and in northeast Allegheny County, along Route 28.
To the south, Highmark has controlling access to its new "affiliation" partner, Jefferson Regional Medical Center, and will be able to send its customers to St. Clair Hospital, as well.
To the west, it has access to Ohio Valley General Hospital and the physicians in the Heritage Valley Health System, as well as West Virginia providers, where Highmark runs the West Virginia Blue Cross Blue Shield unit.
To the east, in addition to the Forbes hospital, it still has a contract with the Greensburg-based Excela Health System, though that relationship is showing signs of wear, as Excela is accusing Highmark of trying to destroy the system.
Highmark's provider reimbursement agreement with Excela was negotiated in 2011 and is still in force, as is Highmark's contract with Heritage Valley.
While friendly relationships and "affiliations" with hospitals in Allegheny and contiguous counties might be enough to satisfy Highmark's local customers and protect against a UPMC breakup, it still may not be enough to feed tens of thousands of extra patients a year to WPAHS and its flagship hospital, Allegheny General, Mr. Jennings said.
"If Highmark is going to compete in the hospital arena, they're going to have to go a lot further east," west, north and south, he said, linking up with hospitals and capturing market share in Ohio, West Virginia and Central Pennsylvania in order to drive referrals to its main hospital investment in Pittsburgh.
Earlier this year, Highmark and UPMC announced a contract extension that will give Highmark customers access to all UPMC facilities through at least Dec. 31, 2014, which would seem to give Highmark two years to build its provider capacity in Allegheny County's northern quadrant.
However, the timeline is actually more compressed, given the realities of federal health care overhaul.
The centerpiece of that reform, online health insurance exchanges that will sell individual polices to those who need coverage, are to be up and running in January 2014, meaning Highmark must have product ready to sell by the third quarter of 2013.
And North Hills customers buying those individual products from Highmark will want to know that Highmark has enough clinics and established practices on board.
First Published August 20, 2012 12:00 am