UPMC’s Monopoly Keeps Wages Low and Prevents Workers from Unionizing, Lawmakers Say

Two Pennsylvania lawmakers are warning their constituents about UPMC, claiming that the academic health system has built a monopoly that negatively affects both employee wellbeing and patient safety. 

Last week, Pennsylvania State Rep. Sara Innamorato and U.S. Rep. Summer Lee held a press conference and released an 18-page report on UPMC, which is the largest non-governmental employer in Pennsylvania. The report analyzes and critiques the health system’s “relentless string of acquisitions and construction of new facilities.” This has resulted in union-busting, low wages for hospital workers and the closure of units and service lines at hospitals that UPMC has acquired, according to the report.

A UPMC representative said executives are reviewing the report and declined to comment.

In just the last 10 years, UPMC went from being a system of 12 hospitals to a network of 40 hospitals. The health system has 8,800 licensed beds, owns an insurance network that covers more than 4 million people, and employs 92,000 workers, according to the report.

“As western Pennsylvania transitioned away from a regional economy built on manufacturing into one built on education, healthcare and services industries, one thing hasn’t changed: the local economy is still overly dependent on a few large employers that tightly control the job market,” the report said.

The report went on to say that UPMC’s concentration across the western Pennsylvania healthcare market gives the health system “considerable power over workers, which it wields to keep wages low, conditions unsatisfactory and prevent union organizing.”

Innamorato and Lee pointed out that UPMC controls three out of every four hospital jobs in Allegheny County. This corporate power has led to a variety of harms to local workers and patients, such as union-busting, they claimed. The report said that any worker who attempted to organize the workplace or form a union has been “surveilled, harassed, intimidated and ultimately fired.”  Anonymous workers testified in the report that their attempts to address staffing and safety issues have resulted in them being written up or having their job threatened.

The report also claimed that “UPMC is notorious for using its market power to acquire, and subsequently shut down, hospitals to reduce competition.” For example, UPMC Pinnacle Lancaster and UPMC Susquehanna Sunbury were shut down in 2019 and 2022, respectively.  In other cases, the health system acquired hospitals only to shutter major department and service lines to drive patients to its other facilities, the report said.

The lawmakers cited research showing that widespread hospital consolidation results in higher costs, lower quality of care, less price transparency, lower wages and worse working conditions. In fact, the Federal Trade Commission has said that consolidated hospitals charge patients prices that are 40-50% higher than those in more competitive markets. And the American Economic Review found that four years post-merger, nurses and pharmacy workers earn 6.8% less than they would if a merger never occurred at their hospital.

Innamorato and Lee said the goal of their report is to “reform the healthcare system in western Pennsylvania so that hospitals live up to the expectations people have of not-for-profit, charitable institutions and large employers that drive the economy.” They laid out recommendations for federal, state and local lawmakers to increase scrutiny of hospital mergers, eliminate the use of non-compete agreements and protect hospital workers in their efforts to form unions. 

The report also called on the state and local government to investigate and reform UPMC’s tax-exempt status, which allows the organization to enjoy property and payroll tax breaks. However, this is not the first time this status has been questioned — the city of Pittsburgh filed a lawsuit challenging UPMC’s tax-exempt status in 2013 but dropped the case a year later.

Photo: Flickr user Douglas Muth