The Highmark-UPMC battle shows how private insurers serve no useful purpose

By Ed Grystar, Chuck Pennacchio and Tony Buba for the Pittsburgh Post-Gazette

The current contract disagreement between Highmark and UPMC provides a clear example of why the free-market health care system has failed. When profit is the primary motive, patient needs get short shrift.

Health care is not a commodity, but a human right. These two “nonprofits” operate with the needs of the public clearly secondary to fulfilling their first objective, which is maximizing profit. The public be damned.

While these two health care businesses fight for market share in our region, the number of uninsured in the country and in Pennsylvania has reached all-time highs, health insurance profits are breaking records for the third year in a row and ever-rising health care insurance premiums are unsustainable for business and the public. Nationwide, they now average $15,000 per year for family coverage while the median family income is approximately $49,000 per year.

What citizens want and need is the ability to choose physicians and providers for their health care needs, not the threat of losing their insurance or a forced choice (unavailable to many) to purchase another insurance plan.

Simply put, patients need and want heath care, not health insurance.

These insurance giants do not bring anything positive to the health care delivery system. They do not care for the sick or treat injuries. They are not necessary to patients, employers or the community.

While some are grateful for Highmark’s takeover of the ailing West Penn Allegheny Health System, there is an inherent and dangerous conflict of interest in joining medical services with private insurance companies — be it UPMC or Highmark — given that insurance companies earn profits by denying care, raising premiums and increasing patient out-of-pocket costs.

Only by replacing the insurance-dominated health care system with an improved Medicare-for-all system can we resolve the myriad problems with the current system.

Now in Congress and in the Pennsylvania Legislature is legislation that would move all citizens to a single-payer, not-for-profit Medicare-for-all system — H.R. 676 in the U.S. House of Representatives and S.B. 400 in the Pennsylvania Senate.

Patients would choose their physicians and hospitals, and decisions on care would be based not on which insurance product you have or network you are in, but on consultation between patient and doctor. Physicians and hospitals would not have to deal with time-consuming and wasteful insurance forms and processing.

In the federal bill, the government would negotiate lower prices for medications from pharmaceutical companies. Insurance company profits, executive salaries and marketing costs would no longer be passed on to the patient in the form of ever-increasing premiums and out-of-pocket costs. In fact, the overhead for the government to administer traditional Medicare is 3 percent, compared to 15 percent to 30 percent for private insurance companies.

Insurance premiums would be replaced with a single-payer fund that would reimburse providers a fair amount. There would be no premiums, deductibles or co-pays. This funding would be based on a tax that would amount to less than current insurance premiums.

Everyone, from cradle to grave, would be covered for all health care needs, including preventive, dental, vision and long term care. Such systems exist in other industrialized countries that spend far less money per capita and achieve better health care outcomes than the United States.

Because everyone would be covered, hospitals in economically distressed communities like Braddock and Aliquippa would stay open because they would be uniformly and fairly reimbursed for the care they deliver and their patients’ medical needs. In our current system, such communities have a larger proportion of people who are uninsured and on Medical Assistance, where reimbursement is lower and hospitals lose money.

Meanwhile, the advertising onslaught by UPMC and Highmark would no longer be necessary.

Opinion polls over the past decade show strong public support for a Medicare-for-all solution. Nevertheless, it has been consciously shut out of the debate by the media and political leaders.

The disconnect between strong public support and the lack of political support in the Congress and state legislatures can only be changed by building a grassroots movement that challenges the power of the big money that dominates our political process. It will take action by the 99 percent to make this happen.

Ed Grystar is co-chair of the Western Pennsylvania Coalition for Single Payer Healthcare ( Also submitting this article were Chuck Pennacchio, executive director of HEALTHCARE4ALLPA (, and Tony Buba, steering committee chair of Save Our Community Hospitals, whose original mission was to keep the UPMC hospital in Braddock.


  1. Sheryl on November 30, 2011 at 3:28 pm

    We live in Vancouver, Wa and we have Aetna as our insurance provider through my husbands employer as a retiree…We had open enrollment and our Hospital was on Aetnas list of providers. We have since been notified by SW WASHINGTON MEDICAL CENTER, a non-profit that they will no longer accept Aetna patients!!!!!!!!!
    How or why would a non-profit hospital deny any money from an insurer er? I certainly do not understand this.
    Aetna told us they could still reach an agreement however the hospital has sent notification in writing they will not accept Aetna. We are however free to use them and their medical Dr’s as a non-provider.
    My husband does use a specialist at that facility and we will have to find another Dr to treat him..
    Something doesn’t feel right about this, nothing we can do about it either…

    • Dave on January 17, 2012 at 3:11 pm

      Sheryl from Vancouver commented on the breakdown in contract negotiations between Aetna and PeaceHealth Southwest Medical Center. I have spoken with representatives of both parties, as well as the insurance commission. Everyone points fingers at someone else. Not surprising. Yet for the number of Aetna members left out in the cold over this lack of a bona fide effort to reach agreement to continue their ability to have access to the facilities, physicians, diagnostics, etc at PeaceHealth Southwest Medical Center, it is appalling. The discontent over this disgraceful lack of concern is growing. Many, many Aetna members are asking the same questions. What role did Aetna have in this debacle? How did the pre-merger overhaul of Southwest Washington Medical Centers’ finance accounting play into the decision (Prior to merger with PeaceHealth). Why didn’t the insurance commission exercise more due diligence before certifying that sufficient substitute services were available to Aetna members without having to go out of state for comparable care? This issue is not dead. These parties will feel increasing pressure to explain how this was allowed to happen, when it could have, and most certainly should have been avoided.

  2. jill on December 2, 2011 at 8:39 pm

    I’m 40 non smoking female, enrolled in colorado’s high risk plan…they’ve raised rates twice this year….$450 mo premiun & $2500 deductible nearly $8k a year……I’ve started researching moving to another country, my condition is treatable not curable. I flat out can’t afford it. I’ve also considered divorcing my husband to qualify for medicaid :( I live in a lot of pain and really want to be a useful productive individual.

  3. Richard Heckler on December 4, 2011 at 11:17 am

    I do not see any need to address phasing out the medical insurance industry. Let that be a matter of choice. Not only should this should not be any part of our mission the matter diverts too much time and money away from IMPROVED Medicare Single Payer Insurance.

    What also should be a matter of choice however is IMPROVED Medicare Single Payer Insurance. Allow we IMPROVED Medicare Single Payer Insurance consumers the right to bring OUR tax dollars home to our respective communities. Yes to take care of us as it should be.

    There are close to 70 million uninsured as we speak. Open up IMPROVED Medicare Single Payer insurance and bring them on. Their tax dollars alone would support a Medicare single payer system. Plus senior citizens would participate. Now there are plenty of tax dollars to support Improved Medicare Single Payer Insurance.

    The 70 million or more uninsured are not associated with any medical insurance company and the industry is raking in profits. The industry does not want the uninsured or the senior citizen population. This is where Improved Medicare Single Payer Insurance steps up to the plate.

    Moreover,Medicare tax dollars pay for critical elements of the health care system apart from direct care. Medicare Insurance funds much of the expensive equipment hospitals use along with all medical residencies. Therefore it is more than appropriate to mandate IMPROVED Medicare Single Payer Insurance for all who wish to sign on.

    Open the IMPROVED Medicare Single Payer Insurance door wide to all who want to switch. In America trillions of tax dollars are collected annually. So everybody in the USA is paying taxes somehow let’s not play pretend.