Unions Ask DOJ to Investigate UPMC's 'Anticompetitive Tsunami'

SEIU, SOC accuse PA's largest health system of widespread abuses of market power.

Unionized workers at UPMC on Thursday filed what they say is a first-of-its-kind formal request with the U.S. Justice Department to investigate alleged wage suppression, onerous staff workloads, and retaliation against workers who complain at the Pittsburgh-based mega-system.    

In the 55-page complaint, SEIU Healthcare Pennsylvania and the Strategic Organizing Center allege that "UPMC not only acquired monopolies and their equivalent in labor markets – monopsonies – in several Pennsylvania hospital markets, but also took anticompetitive actions that maintained and expanded those monopsonies over workers, in violation of federal antitrust laws."

"Nowhere has UPMC exercised its dominance more aggressively than in labor markets," the complaint says. "UPMC's monopsony power has enabled UPMC to suppress workers' wages and benefits, drastically increase their workloads, and prevent workers from exiting or improving these working conditions through a draconian system of mobility restrictions and widespread labor law violations that lock-in sub-competitive pay and working conditions."

UPMC did not respond Thursday to HealthLeaders' requests for comment.

Michael Zucker, executive director of the SOC, says the complaint follows a nine-month investigation by the unions and comes as UPMC has grown exponentially in the past 20 years. The complaint notes that UPMC dominates hospital markets in Pittsburgh and other Pennsylvania regions, employing 92,000 workers. Its annual revenue is more than $26 billion, and it owns 40 hospitals and more than 800 outpatient facilities.

"UPMC has created the perfect anti-competitive storm, where it has grown too large and dominant over hospital markets and hospital workers," Zucker says.

The complaint raises questions about UPMC's "potentially anticompetitive acquisitions" of 17 Pennsylvania hospitals in 10 years and reduced capacity, closing four hospitals and downsizing three others and eliminating 353 beds and 1,367 full-time and 433 part-time jobs at those closed and downsized facilities.

"Reducing capacity is a classic means by which monopolists and monopsonists exercise market power anticompetitively," the complaint says.

Wage Suppression

The complaint alleges that UPMC wages have declined over the years, even as the health system has seen exponential growth. The unions cite a study from Econ One Research that shows that UPMC workers across all job categories earn 2% less on average than workers at comparable hospitals.

For some workers, the complaint alleges that the gap is even higher. LPNs had an average wage penalty of $1.31 per hour, direct care contract workers had almost a $9-per-hour wage penalty, and low-wage workers saw a wage penalty of more than $1 per hour.

The wage study also alleged that for every 10% of UPMC's market share, the wage penalty is worse by between 30 and 57 cents per hour. "This wage suppression translates into significant wage gaps for UPMC workers – especially in places where UPMC has 50% and even more of market share, like Pittsburgh, Altoona, and Williamsport," the complaint says.

In addition to the suppressed wages, the complaint alleges that UPMCs staffing ratios have fallen steadily over the last 10 years, even as ratios at other Pennsylvania hospitals have increased. As of 2020, UPMC ratios averaged 19% lower than non-UPMC staffing ratios, were worst in the markets controlled by UPMC, and better where UPMC has less market power.

"If, as we believe, UPMC is insulated from competitive market pressures, it will be able to keep workers' wages and benefits – and patient quality – below competitive levels, while at the same time continually imposing further restraints and abuses on workers to maintain dominance in the markets where it operates," the complaint alleges.

Retaliation

The complaint alleges that UPMC uses its footprint to stifle worker unrest using non-compete clauses, "blacklisting" ex-employees from rehiring, and suppressing workers' efforts to organize, with UPMC amassing 133 separate charges of unfair labor practices since 2012.

UPMC workers in a survey compiled by the unions reported "shockingly high level of concerns regarding potential retaliation for raising issues regarding working conditions."

Three-quarters (74%) of the approximately 600 UPMC workers who responded to the recent survey say they could suffer retaliation for raising issues about working conditions, and 92% of respondents say they may face retaliation for supporting unionization at their job

"Workers have only two ways to compete for jobs: they can leave their current job and look for a better one, or they can stay and try to obtain better working conditions," says Matt Yarnell, president of SEIU Healthcare Pennsylvania. "We believe UPMC is cutting off both avenues of competition, giving it a huge advantage in Pennsylvania labor markets, and harming workers, patients and competition overall. Today we are seeking action to end these abuses."