Unions accuse UPMC of exercising market power against workers

A coalition of labor unions filed an antitrust lawsuit Thursday at the Justice Department against UPMC, the giant employer of a Pittsburgh-based hospital, accusing the system of using its vast leverage to drive down wages and harm workers.

In its complaint, the group, which includes SEIU Healthcare Pennsylvania, alleges that UPMC employees are being “penalized” due to the healthcare system’s dominance in local markets. The complaint describes nurses who are being subjected to a heavier workload than other hospitals, raising patient safety concerns, and lists labor law violations which the coalition sees as labor law violations and which it says are causing impotence of employees show how working conditions can be improved.

“We’ve seen UPMC grow and gain power,” said Matthew Yarnell, president of the local SEIU group, which has long sought to organize workers in the largely non-union healthcare system. After a series of acquisitions, it is Pennsylvania’s largest private employer, with more than 40 hospitals, 800 physician offices and clinics, and a health insurance plan. With annual operating sales of $26 billion, the company employs approximately 95,000 people.

While antitrust cases often raise the issue of how powerful companies can act as monopolies and unjustifiably raise prices, a company can also be accused of acting as a monopsony by unfairly influencing suppliers, including employees.

Healthcare and legal experts say this is a novel legal approach to address the impact on workers of widespread consolidation in the healthcare industry.

In the complaint, the unions allege that UPMC’s monopsony power has also prevented workers “from opting out of, or improving, those working conditions through a draconian system of mobility restrictions and widespread labor law violations that provide for uncompetitive wages and working conditions.” “.

A UPMC spokesman asked for comment did not directly address the unions’ allegations that they had violated antitrust laws, but defended the treatment of workers. The system “ranks among the best places to work in all the regions we serve,” Paul Wood, UPMC’s chief communications officer, said in an email. He said the system’s average wage is over $78,000 a year.

“In the regions where UPMC operates, there is no other employer of this size and reach that offers well-paying jobs at all levels and an average wage of this magnitude,” he added.

He also said the healthcare system assigns nurses based on patient needs and that there is no policy that would prohibit an employee who has left one facility from being rehired at another.

But federal regulators have signaled an increased willingness to examine the impact of an employer’s market power on workers, and concerns about how consolidation is affecting labor markets “are gaining momentum and attention,” said Jaime King, a law professor at the University of Auckland and antitrust expert.

“The problem is much bigger than a single merger in a single market,” said Marka Peterson, legal director of the Strategic Organizing Center, a working 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 an indictment would be warranted.

The Biden administration expressed concern about the impact of concentration on labor markets in a 2021 executive order, and the Federal Trade Commission recently issued a proposed rule that would prohibit the use of non-compete clauses.

Increasing consolidation in the healthcare industry has also resulted in increased focus on the impact on the workforce. Some research into hospital mergers has shown that nurses’ wages have fallen. “Healthcare has a two-way focus,” said Kate Bahn, an economist and research director at the Urban Institute.

And across the industry there is a shortage of healthcare workers, many of whom have suffered severe burnout during the pandemic. The heavy workload has led to numerous strikes by nurses, including recent strikes in New York hospitals.

UPMC has often been criticized for what some call anti-competitive behavior, and a report released earlier this year repeated some of the issues raised in the complaint.

However, whether the Justice Department will take action against the health system remains to be seen. While federal regulators may understand the theory underlying the unions’ complaint, these cases are challenging. “Monopson cases are not new, but they are very difficult to prove,” said Matthew L. Cantor, antitrust attorney and partner at Constantine Cannon.

This would be the first case based primarily on the argument that a powerful healthcare employer is using its influence in a way that harms workers, and prosecutors must decide whether they have solid evidence to take action . “They’re not going to want to fight a case that they think they can’t win,” said Elena Prager, an economist at the University of Rochester’s Simon Business School and a visiting scholar at the Justice Department.