Sherman Act Challenge in Pittsburgh Health Care Market

West Penn Allegheny Health Systems filed suit in Western Pennsylvania District Court, against Pittsburgh’s dominant hospital system, UPMC, and Highmark Inc., the city’s dominant health insurer, accusing both defendants of violating Sections 1 and 2 of the Sherman Act, by conspiring to monopolize and an attempting to monopolize Pittsburgh’s healthcare market.  According to the complaint, since at least 2002, the defendants have been conspiring to 1) stifle competition; 2) hike up prices; and 3) drive West Penn Allegheny, a UPMC competitor, out of business.  According to the complaint, UPMC and Highmarket agreed the UPMC would not offer reasonable contract terms with own health insurance affiliate to any competing health insurer, and Highmark agreed to shutter its low-cost Community Blue product and pay inflated reimbursement rates to UPMC while depressing rates for UPMC’s competitors.  In its prayer for relief, besides demanding an unspecified amount of damages, plaintiff also sought the following orders: 1) directing Highmark to contract with plaintiff on “fair and equitable” terms, and 2) directing UPMC to divest its own health insurance affiliate and discontinue its joint ventures with independent community hospitals. 

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