PinnacleHealth/UPMC: Would they create a monopoly in Cumberland?
Cumberland County faces the greatest risk of facing a health care monopoly if Harrisburg-based PinnacleHealth has its way.
Cumberland is one of four midstate counties to be affected by PinnacleHealth's announcement Tuesday to buy four local hospitals and then eventually affiliate with University of Pittsburgh Medical Center.
PinnacleHealth, which already operates three hospitals between Dauphin and Cumberland counties, intends to buy a second hospital in Cumberland – Carlisle Regional Medical Center – as well as Memorial Hospital in York and two hospitals in Lancaster County.
There are currently three hospitals in Cumberland County – PinnacleHealth’s West Shore Hospital, Carlisle Regional Medical Center and Geisinger Holy Spirit.
If the proposed deal between PinnacleHealth and Tennessee-based Community Health Systems Inc. goes through, PinnacleHealth will operate two of Cumberland County’s three hospitals, leaving Geisinger Holy Spirit the only in-county competition.
The situation in Cumberland County could become grounds for the Federal Trade Commission to flag the affiliation between PinnacleHealth and UPMC. Some experts have speculated that PinnacleHealth may have to sell Carlisle Regional in order to join UPMC.
Monopoly power is usually the reason a health system deal is blocked, said Dr. Patrick Michael Plummer, a professor of health administration at Penn State Harrisburg. "Carlisle probably has that."
A potential lack of competition was among the reasons the FTC blocked the merger last year between PinnacleHealth and Derry Township-based Penn State Health Milton S. Hershey Medical Center.
The situation in other Central Pennsylvania counties is different than it is in Cumberland, Plummer said. While UPMC would be a new player in Lancaster and York counties as well, its presence wouldn’t really change the extent of competition, just ramp up its intensity, Plummer said.
Memorial Hospital in York will still face its longtime rival WellSpan Health. And the two Lancaster County hospitals that are part of the proposed PinnacleHealth deal – Lancaster Regional Medical Center and Heart of Lancaster – will still see competition from WellSpan and Lancaster General Health/Penn Medicine.
Despite a change in ownership for its competition, WellSpan said its position in York and Lancaster counties is strong because of its community-focused approach and its close partnerships with other health systems like Hershey Medical Center and Maryland-based Johns Hopkins University, according to spokesman Brett Marcy.
"We've been taking care of the residents of York County for almost 140 years," Marcy said. "We think we're really familiar with the unique health care needs of the people who live here."
In Lancaster County, WellSpan's ownership of Ephrata Community Hospital gives it a similar local strength, Marcy said, adding, "We believe that health care should be local. Area residents should be able to access care without having to travel far from home."
In Lancaster County, PinnacleHealth's proposed purchase of two local hospitals could lead to "exciting opportunities and benefits," according to Cheryl Irwin-Bass, vice president and COO of the Lancaster Chamber of Commerce and Industry.
"Individuals could benefit from additional health facilities aligned with major health networks that could bring about new and increased services, as well as more choices in both health care and health insurance plans," Irwin-Bass said. "We were pleased to see the commitment from PinnacleHealth to offer employment to current local hospital employees. That is always an important factor in transactions such as this."
Cumberland County also appears warm to the idea of PinnacleHealth moving in.
"Carlisle Regional Medical has been a pillar in the Carlisle area for decades, and the affiliation of PinnacleHealth will only elevate the level of health care service to the citizens and businesses of the community," said Jonathan Bowser, CEO of the Cumberland Area Economic Development Corp. "Pinnacle's West Shore campus has been a great success, so the continued migration to the western part of the county seems logical for expanded growth."
Reporter Jennifer Wentz contributed to this report.