Impacts of Health Care Industry Consolidation in Pittsburgh, Pennsylvania: A Qualitative Study

Abstract

While most studies of health care industry consolidation focus on impacts on prices or quality, these are not its only potential impacts. This exploratory qualitative study describes industry and community stakeholder perceptions of the impacts of cumulative hospital, practice, and insurance mergers, acquisitions, and affiliations in Pittsburgh, Pennsylvania. Since the 1980s, Pittsburgh's health care landscape has been transformed and is now dominated by competition between 2 integrated payer-provider networks, health care system UPMC (and its insurance arm UPMC Health Plan) and insurer Highmark (and its health care system Allegheny Health Network). Semi-structured interviews with 20 boundary-spanning stakeholders revealed a mix of perceived impacts of consolidation: some positive, some neutral or ambiguous, and some negative. Stakeholders perceived consolidation's positive impacts on long-term viability of health care facilities and their ability to adopt new care models, enhanced competition in health insurance, creation of foundations, and pioneering medical research and innovation. Stakeholders also believed that consolidation changed geographic access to care, physician referral behaviors, how educated patients were about their health care, the health care advertising environment, and economies of surrounding neighborhoods. Interviewees noted that consolidation raised questions about what the responsibilities of non-profit organizations are to their communities. However, stakeholders also reported their perceptions of negative outcomes, including ways in which consolidation had potentially reduced patient access to care, accountability and transparency, systems' willingness to collaborate, and physician autonomy. As trends toward consolidation are not slowing, there will be many opportunities to experiment with policy levers to mitigate its potentially negative consequences.

Keywords: Pennsylvania; Pittsburgh; economic competition; health care economics and organizations; health care sector; health facility merger; health services accessibility; hospital restructuring; insurance; interview; qualitative research.

Figure 1.

Locations and ownership status of Pittsburgh non-government acute care hospitals: 1989, 1999, 2009, and 2019. Notes. Hospitals not affiliated with UPMC or Allegheny Health Network (AHN) or its predecessors, the Allegheny Health Education and Research Foundation (AHERF) or West Penn Allegheny Health System (WPAHS) are light circles. Hospitals acquired by UPMC are dark triangles. Hospitals acquired by AHERF are dark pluses, WPAHS are dark crosses, and AHN are dark squares. If hospitals have changed locations over time, they are represented by their current location. Government, psychiatric, and long-term acute care hospitals (and conversions of acute care hospitals to subacute care hospitals) are excluded.