UPMC CEO Jeffrey Romoff on ongoing feud with Highmark: 'That's what disruption is about' — 5 things to know

UPMC and Highmark Health, both based in Pittsburgh, have been locked in a years-long feud fueled by the continued hybridization of their organizations. Their respective CEOs look upon this dispute with more optimism than patients, according to The Washington Post.

UPMC is an established provider that also owns an insurance services division covering 3.2 million people in western Pennsylvania, while Highmark's insurance covers 5 million people across three states and is the fourth largest Blue Cross and Blue Shield-affiliated organization in the nation. Since 2011, the health insurer has expanded its provider services. Highmark Health reported an operating revenue of $18.6 billion in fiscal year 2016, the most recent figure available, while UPMC's operating revenue was $14.3 billion in fiscal year 2017.

Here are five things to know about the perspective Highmark and UPMC leaders bring to their feud based on reporting from the Washington Post.

1. Many Pittsburgh-area residents believe the relationship between Highmark and UPMC is a contentious one, as evidenced by increasingly aggressive ad campaigns and contractual fights, that has pushed each organization further into individual silos. UPMC CEO Jeffrey Romoff differs in opinion. He said the competition — which took off in 2011 upon Highmark Health's foray into the provider realm — is an essential agent of innovation.

"In the midst of it, [the competition] was disruptive. 'Oh, they were at each other's throats' — and that's the way it appeared, but that's what disruption is about. And let's be clear about this: Without disruption, change is much, much slower," said Mr. Romoff, according to The Washington Post.

2. While many of UPMC's goals are related to research innovations and highly complex procedures, Highmark CEO David Holmberg views his organization's mission as much simpler.

"I want to keep people healthy; I want to keep them out of the hospital. Think of it like a consumer market," Mr. Holmberg said, according to The Washington Post. "You can do things differently because you're not worried about heads and beds. You're not trying to fill up the hospitals."

3. Mr. Romoff does not rest his sights solely on local competition, but instead looks beyond the horizon as tech companies such as Amazon begin to enter the healthcare space.

"There's nothing in healthcare, that we know of, that UPMC doesn't have an entry into that marketplace," said Mr. Romoff, according to The Washington Post.

4. Though the top executives at Highmark and UPMC may see their feud in optimistic light, patients caught between these organizations are not as hopeful.

"I call it 'the war,' " said Sue Kerr, a Highmark member with a UPMC physician, according to The Washington Post. Treatment options for Ms. Kerr's tendinitis were complicated by her Highmark plan's inability to cover UPMC specialists. "You should consider switching providers, switching insurances — switch this, switch that. I was like, 'We paid for this.'"

5. The UPMC-Highmark relationship grew tense in 2011 after Highmark rolled out plans to acquire the struggling West Penn Allegheny Health System for nearly $500 million. The move was part of the insurer's $1 billion transition to become a dual payer and provider. With Highmark acting as a competing provider, UPMC announced it would kick Highmark's health plan members out of its network after their contract expired. Though intervention from state lawmakers led to a contract extension, the new agreement only lasts until 2019.

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