Unions accuse UPMC of exercising market power against workers
A coalition of trade union groups filed an antitrust request on Thursday complaint with the Justice Department against UPMC, the giant Pittsburgh hospital employer, accusing the system of using its massive clout to depress wages and harm workers.
In its complaint, the group, which also includes SEIU Healthcare Pennsylvania, alleges that UPMC workers are facing a “wage penalty” because of the health system’s dominance in local markets. The complaint describes nurses receiving heavier workloads than nurses at other hospitals, raising concerns about patient safety, and catalogs what the coalition considers labor law violations that it says illustrate workers’ powerlessness to improve working conditions.
“We’ve seen UPMC grow and gain power,” said Matthew Yarnell, the president of the SEIU group there, which has long sought to organize workers in the health system, which is largely unorganized by unions. After a series of acquisitions, it is Pennsylvania’s largest private employer with more than 40 hospitals, 800 doctor’s offices and clinics, and a health plan. With operating revenue of $26 billion last year, it employs approximately 95,000 people.
While antitrust cases often address how powerful organizations can operate as monopolies and unfairly raise prices, a company can also be accused of operating as a monopsony where it unfairly influences suppliers, including employees.
Health care and legal experts say this is a new legal approach to considering the impact on workers of widespread consolidation in the health industry.
In the complaint, the unions allege that UPMC’s monopsony power has also prevented workers from “leaving or improving these working conditions through a draconian system of mobility restrictions and widespread labor law violations that lock in subcompetitive wages and working conditions.”
Reached for comment, a UPMC spokesperson did not directly address the unions’ claim that it violated antitrust law, but defended the treatment of workers. The system “is one of the best places to work in all the regions we served,” Paul Wood, UPMC’s chief of communications, said in an email. He said the system’s median wages were more than $78,000 a year.
“There are no other employers of the size and scope in the regions served by UPMC that offer high-paying jobs at every level and average wages of this size,” he added.
He also said the health system assigned nurses based on patient needs and that there was no policy that would prohibit 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 concerns about how consolidation affects labor markets are “getting a lot of momentum and attention,” said Jaime King, a law professor 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 for Strategic Organizing Center, a labor coalition formerly known as the Change to Win Federation.
The Justice Department could decide whether to conduct its own investigation and whether any charges are warranted.
The Biden administration expressed concern about the impact of concentration on labor markets in a Implementing Decree 2021and the Federal Trade Commission recently issued a proposed rule that would prohibit the use of non-compete clauses.
Increasing consolidation in healthcare has also drawn some attention to the dropout rate among the workforce. Some studies of hospital mergers have shown a reduction in nurses’ wages. “Health care is distinguished by being concentrated on both sides,” said Kate Bahn, an economist and research director at the Urban Institute.
And healthcare workers, many of whom suffered severe burnout during the pandemic, are in short supply across the industry. The heavy workload led to numerous nurse strikes, including recent strikes at hospitals in New York City.
UPMC has often been criticized for what some describe as anti-competitive behavior, and a report released earlier this year reiterated 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 seem sympathetic to the theory underlying the union complaint, these matters are challenging. “Monopsony cases are not new, but they are very hard 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 healthcare employer uses its influence in ways that harm employees, 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 Business School who has served as a visiting researcher with the Justice Department.