UPMC and Highmark Soap Opera Continues…

The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.H. L. Mencken

That Mencken quote might well describe UPMC’s public relations strategy in Western Pennsylvania. Because “yes,” UPMC is at war with Highmark (over the insurance giant’s desire to establish West Penn Allegheny Health System (WPAHS) as a viable competitor) and because “yes,” the local populace has grown accustomed to being horrified. Despite that, most folks fail to realize that UPMC surrendered on the PR front a long time ago; that doing so may have been part of its strategy all along, as it now has far greater freedom than does Highmark. No one expects UPMC to play nice. Highmark hasn’t yet “earned” such luxury.

Just this week, Highmark went about announcing a big raise for its docs ($50M in additional reimbursements over the next 5 years) before going public with yet another legal complaint against UPMC. This time, Highmark complained that UPMC failed to return confidential documents (documents about its takeover bid) that it claimed UPMC wrongfully obtained. Bottom line, it wants its stuff back.

  • FYI, Highmark and WPAHS first announced that they would join forces 19 months ago in a deal that would put WPAHS and its hospitals under control of Highmark’s new provider wing in exchange for hundreds of millions of dollars in new loans, cash and capital improvements. But the deal stalled for a variety of reasons –some typical (local politics) and some not (UPMC’s relentless maneuvering to kill a would-be competitor). But things seem to be back on track for Highmark. In addition to the $50 million raise it just gave to its docs, a new “debt deal” through which Highmark will pay more than $600 million, or 87.5 cents on the dollar, looks like it’s going to be enough to make its takeover bid successful.

But back to “paper gate.” Yesterday, Highmark asked a local judge to order UPMC to return those same documents mentioned above. Highmark claims that 138 documents were highly sensitive and confidential, yet rival UPMC “wrongfully disseminated them within UPMC and third parties.” UPMC spokesman Paul Wood said the attorneys for the health system had already returned to the court all the sealed documents after reaching an agreement with Highmark‘s prior legal counsel in December. However, Wood said Highmark is now launching a “baseless and hyperbolic attack on UPMC‘s receipt and retention of the remaining documents.” In other words, Wood is crowing about having already returned the sealed documents that UPMC shouldn’t have had in the first place and he’s now indignant about Highmark’s claim that it should return the rest. “I was personally and professionally appalled to read that UPMC has obtained and used these documents, and also at the arrogance of UPMC when it previously appeared before the court on this matter,” said Jerry McDevitt, an attorney representing Highmark.

Having recently blogged about our collective fascination with train wrecks, I readily admit that I can’t look away on this one. This isn’t a story about two juggernauts battling for the moral high ground, because UPMC could care less about any moral high ground. UPMC subscribes to the Thoreauvian ideal that it’s better to be good at something than simply good –and being the dominant, unchallenged, non-profit healthcare provider (first in Western, PA.; then the world) is what it’s good at. And anyone or anything that seeks to disrupt that entitlement is going to get the same treatment. Is that so wrong?

IMHO, Highmark’s attorneys must become better counter punchers. They need to make UPMC miss, and when they do, they need to make sure they make them pay. Otherwise, UPMC will continue with its “endless series of hobgobblins” and when Highmark responds, it will continue to look, by comparison, as frustrated and distracted. If there was ever any damage suffered by Highmark as a result of UPMC’s possession of those confidential documents, it was done a long time ago. Sometimes it’s just better to ignore bad behavior and move on. And this is one of those cases.

—Tom Finn

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