Central Pa. market could be poised to deliver lower health costs: Our view
It is hard to miss what may well be one of the biggest changes for health care in York County.
A new hospital has been rising on a hill just north of heavily traveled Route 30 in West Manchester Township. When it opens in 2019, it will replace an existing, older hospital off Interstate 83 in Spring Garden Township.
A story in this week’s issue examines the potential ripple effects of the new hospital, to be called UPMC Pinnacle Memorial Hospital. New businesses are springing up nearby and others are sure to follow.
The biggest changes, however, will not involve cranes and earth movers. The entry of UPMC into York County – and Central Pennsylvania as a whole – is a test of whether healthy competition can drive down health care prices.
UPMC is pumping new life into existing hospitals all around the region, hospitals that were not always considered strong competitors to more dominant institutions – notably WellSpan Health in York County and Penn Medicine Lancaster General Health in Lancaster County.
But after moving in last year, UPMC said it plans to invest $1.5 billion in the region.
It is not the only big spender.
Penn State Health is set to plunk down $1 billion through its partnership with health insurer Highmark, and has already unveiled plans for a new hospital in Cumberland County. And in another story in this week’s issue, we look at how LG Health, Capital BlueCross and other partners are investing in health care innovations.
Our hope is that all this spending leads to lower costs for patients – and for the businesses that foot much of the bill.
Reductions are not a given – the steady upward march of health care costs over the last few decades is well-documented. And when rivalries heat up, weaker competitors sometimes flounder rather than rising to the occasion.
The path to lower prices will not be easy. Among other factors, it involves greater transparency among providers and still more pressure from payers, including employers. It may even require greater scrutiny of what nonprofit health systems do with the money they bring in.
Nonetheless, we are about to find out if a competitive market featuring large, strong institutions can deliver on the promise of lower costs. Employers have waited long enough.