West Penn Allegheny Health System in Pittsburgh filed a federal antitrust lawsuit accusing its bigger rival, University of Pittsburgh Medical Center, of seeking to destroy the five-hospital system through a conspiracy with Highmark, the markets dominant health insurer. Both Highmark and 12-hospital UPMC issued emphatic statements suggesting West Penn Allegheny is looking for scapegoats.
According to the lawsuit, filed in U.S. District Court in Pittsburgh, UPMC and Highmark since 2002 have carried out a conspiracy to protect each other from competition, leading Highmark to scrub a low-cost insurance product that sent patients to West Penn Allegheny and depressed reimbursement rates to the system.
Efforts by WPAHS to distract from its own operational failings by filing this lawsuit accusing UPMC of misdeeds are simply a tactic to divert attention from their own operating and financial difficulties, according to Paul Wood, UPMCs vice president, public relations. An audit last year by West Penn Allegheny revealed three years of accounting mistakes and compelled the system to write down $73 million.
This lawsuit represents a misguided effort by West Penn Allegheny to alleviate its growing financial problems during these difficult economic times, according to Highmark.