UPMC & Highmark - Assignment Example

UPMC and HIGHMARK The of Pittsburg Medical Center (UPMC) and Highmark are Pittsburgh’s elite medical s. Clients (patients) who usually benefit from the full cooperation of these institutions are the only ones who are likely to feel the effects of the split between the two institutions. This article, therefore, analyses the cause of this looming split between UPMC and the insurer Highmark Inc. and the impact it will have not only on the clients, but also on the institutions themselves. The article also outlines what each institution says about the other.

The key reason for this battle is the attempt by Highmark Inc. to acquire a financially troubled group of hospitals known as West Penn Allegheny Health System. Highmark Inc. argues that this move will significantly lower medical costs and offer efficient health care services (Scarpino, 2013). On the other hand, UPMC, which has its own insurance firm, believes that it will not continue to bolster a company that will be a direct rival to its 19 area hospitals (Scarpino, G. 2013). Therefore, UPMC has resulted to increasing charges for patients covered by Highmark.

UPMC says that Highmark’s plan to shift its 41000 inpatient from UPMC to its allegedly new chain of hospitals will result into UPMC closing its Shadyside and UPMC mercy sections and laying off over 11,000 of its employees (Baumol & Blinder, 2012). Additionally, UPMC also argues that this move will make most employees change their insurance plans that are attached to their current places of employment. This will result into the lose of patients tied to Highmark.Highmark also says that since UPMC has its own insurer, then it would be of no issue if it had its own health giver network.

They believe that a little competition will be beneficial to the residents of Pittsburg since they will be provided with a range of health care providers to choose from. In response to UPMC’s sentiments that it is impossible to change insurance since it is tied to employment, Highmark says that it is also difficult for the patients to abandon the doctors that they have fully trusted and build confidence in, in pursuit for new relationships (Baumol & Blinder, 2012). I feel that UPMC has been able to get their message across most effectively because they have clearly shown that Highmark is in pursuit of its own personal interests without caring about the patients and relationships that they had built with UPMC.

All the counter reactions made by UPMC were in the attempt to protect their business, as most health systems need to do in order to survive. The solution to this health care problem is providing customers complete autonomy to choose their health care providers and at the same time, separating insurance from employment. This will result into positive competition that will see customers go for health care providers who satisfy their needs more effectively (Brignano, 2009). Competition is healthy in the healthcare industry since it will lead to reduced cost of medical care and an overall increase in efficiency in order to attract more customers.

In conclusion, it is clear that both the institutions were acting in a manner that best serves their interests. Being the elite care providers in Pittsburg, they flexed their muscles in order to cause turbulence that would in the end, lead to a win-win situation where both the insurer and the care giver get the most of the services they provide.ReferencesBaumol, W. J., & Blinder, A. S. (2012). Economics: Principles & Policy. S.l.: South-Western Cengage Learning.Brignano, M. (2009). Beyond the bounds: A history of UPMC.

Pittsburgh, PA: Dorrance Publishing Co.Scarpino, G. (2013). The rise and fall of faith-based hospitals: The Allegheny County story. Bloomington, IN: Authorhouse.