Skip to main content
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Current News
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Digital Health
    • Transformation
    • ESG
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Opinion
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Excellence in Governance
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top Innovators
    • Diversity in Healthcare
      • - Luminaries
      • - Top 25 Diversity Leaders
      • - Leaders to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Digital Health Transformation Summit
    • ESG: The Implementation Imperative Summit
    • Leadership Symposium
    • Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Diversity Leaders Gala
    • Top 25 Women Leaders Gala
    • - Hospital of the Future
    • - Value Based Care
    • - Hospital at Home
    • - Workplace of the Future
    • - Digital Health
    • - Future of Staffing
    • - Hospital of the Future (Fall)
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
  • Data Center
    • Data Center Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • Newsletters
  • MORE+
    • Contact Us
    • Advertise
    • Media Kit
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Providers
September 23, 2014 01:00 AM

UPMC-Highmark feud prompts employer to ditch Highmark, others may follow

Bob Herman
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    Erie Indemnity Co., an Erie, Pa.-based company that provides automobile, home and life insurance, has decided to drop Highmark as the health plan for its 4,600 employees, due in large part to the ongoing blood feud between insurer Highmark and hospital giant UPMC. Its decision could be a harbinger of what other Western Pennsylvania employers will do next year as they seek to find shelter from the fallout of the battle.

    Erie Insurance will switch to UnitedHealthcare, the largest health insurer in the country. Becky Dudenhoeffer, vice president of company benefits, said in a memo the change will go into effect Jan. 1. About 90% of healthcare providers used by Erie Insurance employees will be covered in UnitedHealthcare's PPO network. About half of the company's employees live in Western Pennsylvania.

    “The ongoing UPMC-Highmark dispute in western PA has concerned many of our employees,” the memo read. “As members of the UnitedHealthcare network, employees will no longer have to worry that they would be restricted to either Highmark or UPMC providers.”

    Erie Insurance spokeswoman Leah Knapp added that the decision to switch plans was “primarily about providing our employees with access to the broadest network of healthcare providers across our footprint and ensuring they have the tools to lead healthy lives.” Erie's CEO, Terrence Cavanaugh, also happens to sit on the board of Highmark Health, Highmark's parent company.

    Earlier this month, Highmark and UPMC outlined terms of a government-brokered agreement. Effective Jan. 1, the contract between UPMC and Highmark expires. Although seven UPMC hospitals and thousands of UPMC-employed specialists will still be considered in-network for Highmark members, UPMC's six major hospitals and doctors who perform procedures there will be out of network.

    Highmark, a Blue Cross and Blue Shield affiliate, and UPMC have been fighting several battles. The drama hit a fever pitch after Highmark agreed to acquire West Penn Allegheny Health System, UPMC's biggest competitor in the greater Pittsburgh area.

    Erie Insurance is not the first employer to drop Highmark recently. Last year, Westinghouse Electric Co., based in Cranberry Township, Pa., just north of Pittsburgh, switched from Highmark to Aetna. Despite the consent decree, many in the area believe the feud will persist and will affect more large employers in how they choose a health plan provider.

    Diane McClune, a vice president at the Pittsburgh Business Group on Health, said many employers are at least considering adding a large insurance company to compete with their Highmark plans. Of the 75 Pittsburgh-area employers her group represents, she said, 60% had Highmark as their primary health plan for employees in 2014. However, going into 2015, a majority will be making a switch or alteration of some sort to ensure employees' primary providers are in network.

    “Our sense is they are adding national carriers to fill that uncertainty” between UPMC and Highmark, McClune said. Roughly 55% of large Pittsburgh employers are making changes to their health plan options due to concerns over access and disruption for employees, she said.

    Despite Erie Insurance's decision, Highmark still expects to retain a large share of the Erie, Pa., market, said Highmark spokesman Aaron Billger. Many consumers in the Erie market traditionally pursue tertiary care at the Cleveland Clinic, located about 95 miles away, rather than Pittsburgh, which is about 125 miles away, he noted.

    “We're disappointed that a local company would leave another local partner to go to a national insurer, but we understand healthcare is transforming,” Billger said.

    Follow Bob Herman on Twitter: @MHbherman

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    20160830_Mike_Pykosz_mm0146(1).jpg
    Q&A: Oak Street Health CEO on growth plans after CVS Health deal
    Rapid growth predicted for hospital-at-home market
    Rapid growth predicted for hospital-at-home market
    Most Popular
    1
    More healthcare organizations at risk of credit default, Moody's says
    2
    Centene fills out senior executive team with new president, COO
    3
    SCAN, CareOregon plan to merge into the HealthRight Group
    4
    Blue Cross Blue Shield of Michigan unveils big push that lets physicians take on risk, reap rewards
    5
    Bright Health weighs reverse stock split as delisting looms
    Sponsored Content
    Modern Healthcare A.M. Newsletter: Sign up to receive a comprehensive weekday morning newsletter designed for busy healthcare executives who need the latest and most important healthcare news and analysis.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Digital Health
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • ESG
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Opinion
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • Data Center
      • Data Center Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • Newsletters
    • MORE+
      • Contact Us
      • Advertise
      • Media Kit
      • Jobs
      • People on the Move
      • Reprints & Licensing