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Pittsburgh Post-Gazette: Allegheny Health Network Serves Notice to Its Rivals With Coraopolis Athletic, Outpatient Center

By November 5, 2022November 15th, 2022No Comments

From Pittsburgh Post-Gazette:

Highmark Health is opening a 78-acre athletic and outpatient medical center to the public in Coraopolis on Monday, three years after rival UPMC and Robert Morris University opened a similar sports complex 5 miles away.

It’s a familiar pattern: In Pittsburgh’s highly competitive health care arena, siting hospitals, labs, doctors’ offices — and now athletic facilities — near competitors has become a way to attract patients in a market where the population has been virtually flat or declining.

Health care executives from the two rivals have said torrid competition between Highmark and UPMC holds down prices for consumers, but some experts in the field challenge that argument. In markets without enough competition, consumers are often on the hook for the cost of duplicating medical services, according to Lawton Robert Burns, professor of health care management at the University of Pennsylvania’s Wharton School.

“It’s very simple: hospitals push the higher costs onto insurers and the insurers pass the higher costs along to employers and employers pass the higher costs along to all the small fry like you and me,” he said.

Consumers win in the strategy through expanded access to medical care, observers note.

But the advantages of competition in medicine generally don’t work in a market dominated by only two competitors, said Mark Pauly, senior fellow at the Leonard Davis Institute of Health Economics at the University of Pennsylvania. Three or more health care providers in a market are needed for pricing competition to hold down costs.

“It’s coming out of your wages,” he said. “Citizens pay for it either through higher taxes or higher health insurance premiums.”

“Is it a good thing? Mostly no,” he said.

In the Pittsburgh region, health care providers are competing for a piece of a shrinking pie.

Allegheny County’s population fell by 10,627 or 0.9% between 2020 and 2021, according to the University of Pittsburgh’s Center for Social and Urban Research. Of the seven counties in the Pittsburgh metropolitan area, only Washington gained population — 313, or 0.1% — during the period.

At the ribbon cutting Wednesday, hospital officials and others pointed to the community benefits of the AHN Montour Health + Sports Medicine Center, which has three soccer and multipurpose fields, including one for year-round use. Seven other outdoor fields are under construction.

“This facility is going to be second to none and it will provide terrific benefits to our organizations, the Coraopolis community and athletes from all around the region,” Tuffy Shallenberger, project developer and Pittsburgh Riverhounds owner, said in a prepared statement.

Read more from Pittsburgh Post-Gazette.

News Mention

  • Mark Pauly, PhD

    John M. Bendheim, W’40 and Thomas L. Bendheim, WG’90 Professor Emeritus of Health Care Management