A group of labor unions filed an antitrust complaint against UPMC, the 18th largest hospital chain in the country, on Thursday. The plaintiffs alleged that the health system has prevented its workers from being able to advocate for themselves and their patients through “a draconian system of mobility restrictions and widespread labor law violations that lock in sub-competitive pay and working conditions.” UPMC told MedCity News that it denies these allegations.
Pittsburgh-based UPMC employs 92,000 people, making it the largest private sector employer in Pennsylvania. The health system currently operates 40 hospitals and 800 outpatient facilities, which bring in an annual revenue of $26 billion. Last year, UPMC reported a $916 million loss.
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Thursday’s complaint against UPMC was filed by SEIU Healthcare Pennsylvania, a union of healthcare workers and caregivers in the state, and the Strategic Organizing Center, a coalition of three labor unions. The unions alleged that UPMC has built a monopsony. This occurs when a company becomes the sole buyer of a good or service in a region, whereas a monopoly refers to one company being the sole producer of a good or service.
The plaintiffs argued that UPMC created a monopsony because it has completed at least 28 acquisitions between 1996 and 2019. Yet, during this time period, the health system also closed four hospitals and downsized three others, resulting in 353 eliminated beds and 1,800 job losses. These mergers and the subsequent reductions in capacity have “harmed competition in both input and output markets,” the unions wrote in the complaint.
The unions also alleged that UPMC “engaged in a multi-faceted campaign” to uphold and strengthen its monopsony power over its workers and prevent them from leaving.
One of the campaign’s tactics was to suppress wages while decreasing staffing and increasing workloads, according to the complaint. The plaintiffs referenced a study conducted by Econ One Research, which showed that UPMC’s buying power in labor markets has artificially kept wages low for its workers. The research showed that when the health system’s market share increases, its workers’ wages decrease relative to comparable hospital employees at a rate of 30 to 57 cents per hour on average in reduced pay for every 10% increase in UPMC’s market share.
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The complaint also alleged that UPMC protected its ability to offer sub-competitive pay and poor working conditions through noncompete clauses and “do-not-rehire” blacklisting for workers. The health system also restricted workers’ labor law rights so they couldn’t form unions to improve their working conditions, the complaint charged.
The unions also argue that UPMC’s staffing levels have been dangerously low in recent years. The complaint said that as of 2020, the health system’s worker-to-patient staffing ratios are 19% lower than the average ratios at non-UPMC hospitals. It also declared that UPMC’s staffing ratios correlate negatively with its market share, as ratios are the lowest where the health system has higher market shares and highest where it has lower market shares.
In their complaint, the plaintiffs cited UPMC workers’ testimonies at a September hearing to state lawmakers regarding staffing problems at Pittsburgh-area hospitals. At that hearing, one employee, Kya Humphries, said it’s incredibly difficult to provide quality care “when every single person involved in care” has been stretched to their breaking point.
“When we’re providing care without enough staff, we know patients aren’t getting meals on time or waiting too long to use the bathroom. We know that more falls will happen. We know we’re not going to be able to provide the kind of care that we want to. That’s not fair to the patients, and it’s not fair to the workers who are doing everything they can to give their patients the best care they can,” Humphries said.
The unions argued that if UPMC were subject to competitive market pressures, the health system would be forced to raise wages in order to attract more workers and provide adequate staffing levels. But instead, the health system has leveraged its monopsony power in the markets where it operates to “insulate it from the pressure of competition,” the plaintiffs wrote.
In a statement to MedCity News, UPMC Chief Communications Officer Paul Wood said that the health system is moving to $18 per hour for its non-union workforce by 2025. He called this the highest entry-level wage of any healthcare provider in the state.
Wood declared that UPMC provides its nursing care based on patients’ needs and acuity rather than fixed staffing ratios. This enables the health system to “staff with flexibility,” he countered. He also denied that the health system blacklists its employees who leave from being rehired by another UPMC facility.
This is not the first time UPMC has come under fire for keeping wages low and preventing workers from unionizing. In January, two Pennsylvania lawmakers warned their constituents about the health system, claiming that its anti-competitive practices have negatively affected both employee wellbeing and patient safety.
Photo: Bet_Noire, Getty Images
