PITTSBURGH (TNS) — Pennsylvania health systems are required to give a 90-day notice before closing. It’s a rule that hospitals have ignored in recent years — and a time limit that consumer advocates say isn’t nearly long enough considering the community fallout.
Moreover, the only way the state attorney general gets wind of a physician practice closing or consolidating into a big health system is through word of mouth.
”The only way we find out about cases is if someone tells us about it,” Tracy Wertz, chief deputy, antitrust section, in the Pennsylvania attorney general’s office, said at an Oct. 4 hearing in Harrisburg. “We rely on parties to give us voluntary information.”
Airing the shortcomings of Pennsylvania’s regulatory review tools was part of a hearing that occurred as the attorney general evaluates the proposed merger of UPMC and Washington Health System.
The attorney general’s office declined to comment on the status of that review.
In addition to a state antitrust law, the attorney general’s office would benefit from a pre-notification requirement for mergers, which would aid her office with additional oversight powers, she told the House Health Subcommittee on Health Facilities. Other states already have the notice requirement.
Pittsburgh-based UPMC’s proposed merger with Washington Health System includes hospitals in Washington and Greene counties. If approved, 18 more medical practices and 350 primary care and specialty doctors in southwestern Pennsylvania would operate under the UPMC banner.
The proposed merger has drawn opposition from SEIU Healthcare Pennsylvania, a Harrisburg labor union that represents some WHS employees, while a consumer advocacy group said the acquisition would drive up the cost of health care.
In the absence of a state law, Pennsylvania enforces federal antitrust statutes enacted in the late 19th and early 20th centuries, Wertz said. Using federal statutes for regulatory enforcement makes the state ineligible to claim damages, costs and related fees, one drawback to the state not having its own law.
The state attorney general can also intervene in a proposed hospital merger as a guardian of consumer interests, called parens patriae, a tool that the office used in court in 2019 to help settle a bitter contractual dispute between Highmark and UPMC.
Although parens patriae helped end the fight between the two corporate titans in Pittsburgh, a state antitrust law would be a more effective tool, according to Joseph Friedman, of counsel at the Downton offices of Clark Hill PLC., who’s not involved in the UPMC/WHS merger.
”That’s certainly weaker than having an antitrust law, which would give them a similar standing as the Justice Department for enforcement,” he said. “It would be very helpful to have a state antitrust law.”
Hospital shutdowns and the closing of doctors’ offices have stranded thousands of patients in rural Pennsylvania, including Columbia and Elk counties, who’ve faced having to travel greater distances for care and finding new providers. In recent years, hospitals have also moved medical services out of rural hospitals to larger, more urban centers.
The community impact of hospital acquisitions by large systems can include higher medical costs, said Rachel Warner, executive director, Leonard Davis Institute of Health Economics at the University of Pennsylvania, who also testified at the Oct. 4 hearing.
Increases of 20% to 30% in commercial health insurance are common after such mergers, she said, while studies have shown that the quality of medical care is sometimes worse.
”The effects of decreased competition on prices are pretty clear,” she said, underscoring the need for a public notification requirement in Pennsylvania. “There should be better public reporting and waiting periods.”
Health insurance premiums are not the only way hospital consolidation can drive up consumer costs.
Because big health systems bill more for medical care than smaller community hospitals, consolidation can increase consumer medical costs by raising the cost of services, according to Patrick Keenan, director of consumer protections and policy at Pennsylvania Health Access Network, a Philadelphia-based nonprofit, who also testified at the hearing.
”Smaller, independent hospitals charge substantially less than large health systems, even in the same geographic area,” he said.
Based on federal pricing disclosures, for example, a forearm X-ray at Washington Hospital is one-third the cost at Canonsburg Hospital, 11 minutes away and owned by Allegheny Health Network, a 14-hospital system, Keenan said.
A CT scan of the face costs $402 at independent St. Clair Hospital in Mt. Lebanon, but $2,700 at UPMC Mercy Hospital and $3,400 at UPMC Presbyterian Hospital, both located in Pittsburghabout 20 minutes away and part of the 40-hospital UPMC system.
In a statement, UPMC said the merger with Washington Health System would enhance the region’s access to care.
”We continue to ensure local residents have convenient local access to high quality care at the lowest cost that is sustainable into the future,” spokeswoman Susan Manko wrote. UPMC has a long track record of “expanding services and hiring more doctors and staff to increase local access and attract new patients.”
Acquisition of smaller hospitals by bigger health care organizations is not always bad, PHAN’s Keenan said. But public oversight of the deals is missing.
”It’s not about whether closure or mergers are bad in every case, but we know that harm occurs in local communities and there is no public review process,” Keenan said. “We really think it’s time to have a state antitrust law. At the time of closure, it’s really too late.”
