On Thursday, a coalition of labor groups filed an antitrust complaint with the Justice Department against UPMC, the Pittsburgh hospital giant’s employer, accusing the system of using its massive influence to cut wages and harm workers.
In its complaint, the group, which includes SEIU Healthcare Pennsylvania, alleges that UPMC workers are subject to a “wage penalty” because of the health system’s dominance in local markets. The complaint describes nurses being assigned a greater workload than nurses at other hospitals, raising concerns about patient safety, and catalogs what the coalition considers labor law violations that it says illustrate staff inability to improve working conditions.
“We’ve watched UPMC grow and gain strength,” said Matthew Yarnell, president of the SEIU group there, which has long sought to organize workers in the health system, which is largely non-union. After a series of acquisitions, it has become Pennsylvania’s largest private employer with more than 40 hospitals, 800 doctor’s offices and clinics, and health plans. With operating revenues of $26 billion last year, it employs about 95,000 people.
While antitrust cases often deal with how powerful corporations can act as monopolies and unfairly raise prices, a company can also be accused of operating as a monopoly in which it exerts unfair influence over suppliers, including employees.
Health care and legal experts say this is a new legal approach to looking at the effects on workers of widespread integration into the health industry.
In the complaint, the unions claim that UPMC’s monopoly power has also prevented workers “from exiting or improving these working conditions through a severe regime of mobility restrictions and widespread labor law violations that lock in wages and working conditions without competition.”
When reached for comment, a UPMC spokesperson did not directly address the unions’ allegation that it violated antitrust law, but did defend its treatment of employees. The system is “among the best places to operate in all of the areas we serve,” Paul Wood, UPMC’s chief communications officer, said in an email. He said the system’s average wage is more than $78,000 annually.
“There are no other employers of the size and scope in the areas where UPMC serves well-paying jobs at every level and an average wage of this magnitude,” he added.
He also said that the health system assigned nurses based on a patient’s need and that there was no policy preventing an employee who left one facility from being rehired at another.
Jaime King, a law professor at the university, said federal regulators have indicated an increased willingness to look at the effects of employer market power on workers, and concern about how merger will affect labor markets is “gaining a lot of traction and interest.” Oakland and antitrust expert.
“The problem is much bigger than one merger into one market,” said Marka Peterson, legal director for the Center for Strategic Organisation, a labor alliance formerly known as the Change to Win Union, which is also filing the lawsuit.
The Department of Justice can decide whether to conduct its own investigation and whether any charges are warranted.
The Biden administration highlighted its concerns about the impact of the focus on labor markets in its 2021 executive order, and the Federal Trade Commission recently released a proposed rule banning the use of incomplete agreements.
Increasing consolidation in the healthcare industry has also focused some attention on the ramifications among the workforce. Some research into hospital mergers has shown a decline in nurses’ wages. “Health care stands out as being focused on both sides,” said Kate Pan, economist and director of research at the Urban Institute.
And health care workers, many of whom have experienced severe burnout during the pandemic, are in short supply across the industry. Heavy workloads have led to many strikes by nurses, including recent strikes at New York City hospitals.
UPMC has often been criticized for what some describe as anticompetitive behavior, and a report released earlier this year reiterated some of the issues raised in the complaint.
But it remains to be seen whether the Department of Justice will continue to take action against the health system. While federal regulators may seem sympathetic to the theory behind the unions’ grievance, these cases present a challenge. “Monopoly cases are not new, but they are very difficult to prove,” said Matthew L. Kantor, an antitrust attorney and partner at Constantine Cannon.
This would be the first case to rely primarily on the argument that a powerful healthcare employer is using its influence in ways that harm workers, and prosecutors must decide whether 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 scholar at the Department of Justice.
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