UPMC Archives - Recon Strategy

The ongoing physician affiliation land grab in Pennsylvania’s Capital District

Jacob Wiesenthal and Tory Wolff December 21, 2021

Closed vs. open Hospitals can compete for patient referrals either by exclusively affiliating with a subset of physicians (“closed model”) or by collaborating with as many qualified physicians as possible irrespective of competing affiliations (“open model”). (Both of these strategies are from the perspective of the facility, of course. A population health strategy would still focus on affiliating with physicians to aggregate patients, but with a goal of minimizing (not just directing) facilities based care.) The two strategies are generally incompatible. If most hospitals use the same approach in a

Profit engine swap-outs: How UPMC sustained itself after the Highmark decoupling

Jacob Wiesenthal and Tory Wolff November 2, 2021

UPMC’s decoupling from Highmark exposed a critical vulnerability: economic dependence on its Allegheny County hospitals. In FY11-12,[1] these hospitals provided 70% of UPMC’s overall operating margin, an average of ~$270M annually.[2] A few years later, these operating margins had been cut in half and, by FY19, these same hospitals could contribute just $9M to the enterprise.[3] How did this happen? The Highmark dispute created severe economic headwinds for its western Pennsylvania (what we call “Core”)[4] hospitals: Decay in payer mix. As Highmark patients went elsewhere, the overall commercial share of

Bring it on: Highmark brings in a long-distance ally to help compete vs. UPMC in cancer care

Tory Wolff March 16, 2014

Summary Allegheny Health Network (AHN), the major delivery system in Pittsburgh owned by Highmark, and Johns Hopkins Medicine have signed a MOU to create an affiliation between Allegheny and the Johns Hopkins Kimmel Cancer Center. Over many years, UPMC has established a very large network of cancer care throughout western Pennsylvania; AHN has responded in kind albeit much less broadly. At this point, there is very little independent cancer care left in the region. By partnering with a prominent UPMC competitor in oncology, the deal is likely designed to shore

Transitioning from patchwork to quilt: NY and PA’s path to integrating HIEs at the state level

James Matheson June 26, 2012

Last month, NY and PA announced plans for how they will integrate data sharing across local HIEs. The state planning efforts share some key parameters: Roughly equal funding with about $20 million in federal grants Initially targeting the integration of data for about 13 million people (in PA’s case the entire state, in NY’s case the NYC metro area) Using a “thin” umbrella model to knit the various existing local HIEs together into a decentralized model Want community involvement of local doctors, community workers, and payers Beyond those parameters, however, the plans look quite different. NY’s approach: Start

Upping in ante in Pittsburgh: the health information exchange arms race

Tory Wolff September 8, 2011

A few weeks ago, UPMC announced an agreement among nine area systems to spend $4M over the next two years to launch a health information exchange called ClinicalConnect. Reportedly, Highmark (and presumably the West Penn Allegheny hospital system it is in the process of purchasing) requested to be a part of the initiative but was refused. Building electronic connections across hospitals – particularly between community systems (such as the non-UPMC participants in ClinicalConnect) and tertiary centers such as the UPMC facilities – helps make transitioning patients easier by making full

Highmark and West Penn: it’s about mitigating consolidation, not transforming the system

Tory Wolff June 30, 2011

Highmark will invest up to $475M in the West Penn Allegheny Health System, a move characterized as a prelude to purchase. This is no bold move to drive closer integration of information flows and care decisions or align incentives in a transformative vertically integrated model. My take: this is about desperately propping up the last competing provider standing in a highly concentrated hospital market. Highmark’s hand was forced by West Penn’s financial bleed out. But, in response, UPMC has thrown down the gauntlet in a move that will reshape the

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Recon takes an analytical look behind select developments in healthcare

The ongoing physician affiliation land grab in Pennsylvania’s Capital District

Profit engine swap-outs: How UPMC sustained itself after the Highmark decoupling

Bring it on: Highmark brings in a long-distance ally to help compete vs. UPMC in cancer care

Transitioning from patchwork to quilt: NY and PA’s path to integrating HIEs at the state level

Upping in ante in Pittsburgh: the health information exchange arms race

Highmark and West Penn: it’s about mitigating consolidation, not transforming the system

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