Editor's note: This is another story in a series looking at the Altoona Regional Health System's proposed affiliation with UPMC.
A Mercyhurst University health care expert believes that if UPMC and Highmark do not resolve their differences regarding in-network care, it might be difficult - if UPMC and Altoona Regional were to merge - for Highmark subscribers in Blair County to keep their policies here.
Blair County has 44,000 Highmark health insurance subscribers.
"If you're used to Highmark, it could potentially bother you," David Dausey, dean of school health professions and public health at Mercyhurst, said. "The lack of choice does disturb people."
UPMC is locked in a struggle with Highmark and has said it does not intend to sign an agreement giving Highmark subscribers in-network access to to UPMC facilities when the current arrangement expires at the end of 2014.
"Where would we go?" asked Jim Snively of Duncansville, who is a state worker in the Altoona area and has Highmark insurance. "I wouldn't want to have to drive to Pittsburgh."
He could change insurance companies - to UPMC, or other firms that may have an agreement with UPMC.
"But that is not up to us," he said, since the state buys his policy and those of his co-workers.
Highmark spokesman Michael Weinstein said his organization wants to work out a long-term contract with UPMC to give its subscribers access to all UPMC facilities and providers.
UPMC spokeswoman Susan Manko also was reassuring in her assessment of the potential access problem.
"Our assumption is that we will continue in a manner similar to that of our sole community hospital in Bedford County, which has open access to all insurers," she said, referring to Highmark's Community Blue plan.
Concerns about Highmark and UPMC crystallized recently when a controversial provision of Highmark's Community Blue took effect, resulting in elimination of most plan subscribers from the patient rolls of UPMC doctors, according to a Pittsburgh Post-Gazette story.
Except for emergency care and several other specific exceptions, Highmark's Community Blue
doesn't allow subscribers access to UPMC care, even if they're willing to pay out-of-network costs or cash.
In an April 22 "position paper," Highmark argues that Community Blue is part of a strategy to take advantage of the lower costs - but good care - available at community hospitals, including independent ones.
UPMC defended itself after the patient elimination led to outrage. Manko said Highmark has "purposely misinformed the public about the plan."
UPMC is refusing to renew with Highmark because it doesn't want to help Highmark build up an integrated delivery system to rival UPMC's own, according to W. Thomas McGough Jr., chief legal officer of UPMC, speaking to the state House Insurance Committee in August 2011.
It doesn't want to let Highmark use its dominant insurance plan and the lure of access to UPMC medical facilities to create the illusion of choice, even as it as it steers patients toward its own newly acquired medical facilities, McGough said.
The community will be better served with two well-funded, integrated health systems competing on a level playing field - and funneling patients from their health plans into their own medical facilities - with at least four national insurance companies offering access to both, McGough said.
Even after 2014, Highmark patients won't really be shut out of UPMC provider services, he said. Those subscribers just won't have low in-network rates, he said. Even there, Highmark could provide those lower rates if it's willing to absorb the extra costs, he said.
Recently, Highmark announced its expansion of Community Blue into central and eastern Pennsylvania - although not to Blair County.
The state House Democratic Policy Committee will hold a hearing Monday on Community Blue and access issues, according to a news release from the House Democratic Caucus.
"Patients can't begin to understand the complex contracts signed behind closed doors between insurers and providers," said State Rep. Tony DeLuca, Democratic chairman of the House Insurance Committee. "They just want to be seen by their doctor and know how much they'll need to budget."
Last week, Geisinger placed an ad in the Mirror critical of Highmark for the central Pennsylvania version of Community Blue, which "forces the most critically ill patients to leave our community and travel to Philadelphia, Pittsburgh, Ohio or Maryland for advanced care."
In Erie, it looks like there will be a choice for patients, as UPMC took over Hamot Medical Center in 2011, and Highmark expects to take over St. Vincent Health System.
But Dausey noted that in Altoona, there might not be much of a choice.
"I don't want to be alarmist about it," he said, predicting people won't be "shocked."
Still, there are areas of the country where there's already a situation like the one that may develop in Altoona, he said. The scenario will become increasingly common in rural areas, he said.
In another form, that limitation on choice is actually common - when employers offer their workers a single insurance option, he said.
The benefits to the kind of quasi-monopoly that UPMC would have if it takes over Altoona Regional include efficiency, according to Dausey.
But that kind of situation doesn't give the organizations in charge the power to raise prices at will, he said. Medicare limits help ensure that, he said.
There would, however, be the potential for "gaming the system" - creative billing to get maximum income, for example, through the strategic classification of facilities, he said.
To dilute the monopoly, other insurance plans that still deal with UPMC could enter the market here, he said.
The trend is toward creation of a handful of "provider-insurers" nationally, and UPMC is shaping up to be one of them, Dausey said.
Highmark could also be one, although UPMC is "light years ahead" in working out affiliation agreements that appeal to smaller hospitals like Altoona, he said.
The more smaller hospitals UPMC captures, the more appealing the system becomes, he said.
UPMC has demonstrated excellence in care, in managing patients and in creating its organizational management structure, Dausey said.
"The rich get richer," he said.
Highmark, which a couple of decades ago had medical services but dropped them, is playing "catch-up," as it tries to re-enter the field, he said.
The rise of big, vertically integrated systems is congruent with health care reform, although Dausey doesn't necessarily think their creation is an explicit intention of the law.
Big organizations are best suited to take advantage, however, of concepts promoted by the Affordable Care Act, including all-electronic medical records, bundled payments, patient-centered medical "homes" and in general, economies of scale, he said.
It's complicated, according to Dausey.
"I wish it were clean-cut," he said. "But it's very nuanced."
Mirror Staff Writer William Kibler is at 949-7038.