, the company created after a not-for-profit Pittsburgh insurer acquired
a struggling not-for-profit Pittsburgh health system, announced a policy to keep the combined operations from stifling competition.
The new policy restricts access by Highmark Health's two subsidiaries—the insurer, Highmark, and the health system, Allegheny Health Network—to each other's “competitively sensitive information” including reimbursement rates. Highmark the insurer cannot see payment rates negotiated by the Allegheny Health Network with other insurers, while the health system cannot see rates negotiated by the insurance arm with other provider systems.
The policy meets one key requirement set by Pennsylvania's Insurance Department to ensure the new company, formed in May in a $1 billion deal,
does not gain an unfair competitive advantage by sharing access between its insurer and provider arms to confidential market information about competing insurers and providers.
The deal is one of several recent transactions that have combined insurers and providers in a single company. Consolidation within and across healthcare sectors has raised concerns about the market power
that the newly combined companies may gain and their potential to drive up prices.
Lisa Martinelli, vice president and chief privacy
officer for Highmark Health, said the new policy sets out procedures for how access to sensitive information will be protected
, monitored and audited and how employees will be educated about the policy. “It's password-protected on steroids,” she said.
About 600 executives in the newly created Highmark Health integrated delivery network have been trained so far on the policy, which received final regulatory approval last week, she said. Online or DVD training will begin on Friday for thousands of remaining network employees.
Martinelli described the policy as pioneering and said Highmark Health officials worked closely with state insurance regulators, who consulted with antitrust and economic experts. “It took us many, many months to get it right,” she said. Follow Melanie Evans on Twitter: @MHmevans