Unions accuse UPMC of exercising market power against workers
A coalition of labor groups filed an antitrust lawsuit Thursday complaint with the Justice Department taking on UPMC, the giant Pittsburgh-based hospital employer, accusing the establishment of using its enormous influence to depress wages and hurt workers.
In their complaint, the group, which includes SEIU Healthcare Pennsylvania, claims that UPMC workers are subject to a “wage penalty” due to the health system’s dominance of local markets. The complaint describes nurses being assigned heavier workloads than nurses at other hospitals, raising concerns about patient safety, and lists what the coalition considers labor law violations that it says , illustrate the powerlessness of employees to improve working conditions.
“We’ve seen UPMC grow and gain power,” said Matthew Yarnell, president of the SEIU group there, which has long sought to organize workers in the largely non-unionized health care system. After a series of acquisitions, it is the largest private employer in Pennsylvania with more than 40 hospitals, 800 doctors’ offices and clinics, and a health plan. With operating income of $26 billion last year, it employs about 95,000 people.
While antitrust cases frequently address how powerful organizations can operate as monopolies and unfairly raise prices, a company can also be accused of operating as a monopsony in that it exerts unfair influence on suppliers, including employees.
Health and legal experts say this is a novel legal approach to considering the effects on workers of widespread consolidation in the healthcare industry.
In the complaint, the unions claim that UPMC’s monopsony power has also prevented workers from “exiting or improving these working conditions through a draconian system of mobility restrictions and widespread labor law violations that block wages and conditions.” subcompetitive labor.
When asked for comment, a UPMC spokesman would not directly address the unions’ claim that it violated antitrust law, but did defend its treatment of employees. The system “ranks among the best places to work in all the regions we serve,” Paul Wood, UPMC director of communications, said in an email. He said the median system salary was more than $78,000 annually.
“There are no other employers of the size and scope in the regions that UPMC serves that provide high-paying jobs at all levels and average wages of this magnitude,” he added.
He also said that the health system assigned nurses based on patient need and that there was no policy that prohibited an employee who left one facility from being rehired at another.
But federal regulators have signaled a greater willingness to look at the effects of an employer’s market power on workers, and concern about how consolidation affects labor markets “is gaining a lot of momentum and attention,” said Jaime King, a professor of law at the University. of Auckland and an antitrust expert.
“The problem is much bigger than a single merger in a single market,” said Marka Peterson, legal director of the Center for Strategic Organizing, a labor coalition formerly known as the Change to Win Federation, which is also filing the lawsuit.
The Justice Department could decide whether to conduct its own investigation and whether the charges are justified.
The Biden administration highlighted its concerns about the impact of concentration on labor markets in a executive order of 2021and the Federal Trade Commission recently issued a proposed rule that would prohibit the use of non-compete agreements.
The increasing consolidation in the health care industry has also focused some attention on the consequences among the workforce. Some research on hospital mergers has shown a reduction in nurses’ salaries. “Health care stands out for being concentrated on both sides,” said Kate Bahn, an economist and director of research at the Urban Institute.
And healthcare workers, many of whom suffered severe burnout during the pandemic, are in short supply across the industry. The high workloads sparked numerous strikes by nurses, including recent walkouts at New York City hospitals.
UPMC has often been criticized for what some describe as anti-competitive conduct, and a report published earlier this year echoed some of the issues raised in the complaint.
But whether the Justice Department will take action against the health system remains to be seen. While federal regulators may seem sympathetic to the theory behind the unions’ complaint, these cases are challenging. “Monopsony cases are not new, but they are very difficult to prove,” said Matthew L. Cantor, an antitrust attorney and partner at Constantine Cannon.
This would be the first case based primarily on the argument that a powerful health care employer is using its influence in ways that harm workers, and prosecutors must decide if they have strong enough evidence to take action. “They’re not going to want to fight a case they don’t think they can win,” said Elena Prager, an economist at the University of Rochester’s Simon School of Business who has served as a visiting fellow at the Justice Department.