A proposed class action alleges University of Pittsburgh Medical Center (UPMC) has engaged in an anticompetitive, “predatory” scheme to gain and hold monopoly power over the provision of healthcare services throughout portions of Pennsylvania, Ohio, New York, Maryland and West Virginia.
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The 44-page antitrust lawsuit claims the Pittsburgh-based defendant, which operates a network of over 40 hospitals and medical facilities and employs more than 95,000 people, has also wielded its “monopsony” over skilled healthcare workers to artificially suppress their wages and benefits and dramatically increase their workloads. In addition, the suit contends that UPMC has used restrictions such as noncompete clauses and “do-not-rehire” blacklists to keep employees from leaving their jobs, and has prevented workers from forming unions that might have allowed them to improve working conditions.
The case charges that the defendant’s monopoly power over hospital services, alongside UPMC’s “draconian system of mobility restrictions and widespread labor law violations” that have trapped employees with sub-competitive wages and working conditions, has also led to higher costs, decreased quality of medical care and reduced price transparency for the consuming public.
According to the complaint, UPMC is “notorious” for using its market dominance to acquire hospitals and subsequently shut down major departments and service lines in order to reduce competition. Over the past two decades, the medical center went on an “acquisitions spree,” which allowed it to become one of the largest hospital chains in the United States and the biggest non-governmental employer in Pennsylvania, the filing says.
The lawsuit claims UPMC has also diminished the availability of hospital services and employment within its geographic reach.
“From at least 1996 through 2019, UPMC harmed competition for hospital labor and hospital services in the regions where it operated by acquiring 28 hospital systems, eliminating four hospitals, and downsizing three others,” the suit states. “As a result of these anticompetitive acts, UPMC eliminated 353 beds and 1,367 full-time and 433 part-time jobs at the facilities it closed and/or downsized.”
Moreover, UPMC, in an effort to “maximize profits at the expense of its labor,” used its increased power as a leading employer in the region to intentionally suppress employee wages to sub-competitive levels, the case alleges.
The complaint cites a study that found that nurse wages at UPMC hospitals were “notably lower” than the average pay in comparable facilities from at least 2008 to 2019. The wage difference ranged from $0.21 to $1.31, the filing says.
“Assuming a 40-hour work week and a 52-week work year, UPMC Nurses experience an average annual income penalty of $1,289.60” as a result of the defendant’s anticompetitive conduct, the lawsuit claims.
In addition to artificially suppressing wages, the medical center has reduced staffing and increased employee workloads without offering supplemental compensation, the suit charges. As of 2020, UPMC staffing ratios—that is, the number of staff per patient—were averaging 19 percent lower than those of comparable facilities, the case relays.
“Each of these restraints alone is anticompetitive, but combined, their effects are magnified,” the complaint stresses, arguing that UPMC’s market power means healthcare workers are “required to do more while earning less” and while being subjected to “increasingly unfair and coercive workplace conditions.”
The filing further claims the defendant restricts employees’ ability to switch jobs by forcing them to agree to “unreasonable” noncompete clauses and putting workers who “dare to leave” on a systemwide “do-not-rehire” blacklist, which effectively eliminates their access to positions anywhere in the entire UPMC system.
The lawsuit adds that “many current UPMC employees, aware of the mobility restrictions, are unwilling to resign from their positions out of fear that they too will be placed on the ‘Do Not Rehire’ list.”
Finally, the suit accuses UPMC of engaging in “pernicious” systemwide union-busting efforts to force workers to accept the wages and working conditions it has imposed. As the case tells it, the defendant has blocked workers from attempting to collectively organize through “surveillance, harassment, intimidation, and, if necessary, termination.”
“Had UPMC been subject to competitive market forces, it would have had to raise wages to attract more workers and provide higher staffing levels in order to avoid degrading the care it provided to its patients, and in order to prevent losing patients to competitors who could provide better quality care. UPMC’s low wages, chronic understaffing and sub-par treatment of its workers, however, suggests that UPMC didn’t need to raise wages to preserve adequate working conditions and it did not need to provide better quality healthcare because within the [r]elevant [m]arket UPMC has monopsony power over health care employment and monopoly power over healthcare services with little competitive pressure in the regions where it operates.”
The lawsuit looks to represent any skilled healthcare workers—including nurses, licensed practical nurses, medical assistants, registered nurses, nurse assistants and orderlies—who are or were employed at a UPMC-affiliated facility providing primary, secondary, tertiary and quaternary inpatient acute care hospital services at any time since February 14, 1996. The suit notes that this includes predecessors, subsidiaries and related entities of any UPMC facility.
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