Opinion ID: 179967
Heading Depth: 3
Heading Rank: 5

Heading: UPMC's Unilateral Conduct

Text: Besides the conspiracy with Highmark, UPMC has taken a number of actions on its own to weaken West Penn. Most significantly, UPMC has systematically raided key physicians from West Penn. Even before West Penn's formation, UPMC hired physicians, including neurosurgeons, oncologists, hand surgeons, cardiologists, gastroenterologists, pulmonologists, and primary care physicians from two of West Penn's predecessor hospitals, including Allegheny General. UPMC lured these physicians away by paying them salaries that were well above market rates. Although UPMC incurred financial losses because of the hirings (that is, it paid the physicians more money than they generated), it admitted that it was willing to do so in order to injure the hospitals. UPMC's physician raiding has continued unabated since West Penn's formation. JA 117. In 2002, UPMC attempted to hire the entire anesthesiology staff of a West Penn hospital. UPMC did so even though its internal analysis showed that the raid would be unprofitable. As before, though, UPMC admitted that it was not trying to earn profits. It was trying to drive the hospital out of business. In the end, the anesthesiologists were lured away by UPMC's bloated salary offers. But they quit not long after joining UPMC, because UPMC lacked sufficient operating space to absorb them. The complaint identifies many additional examples of so-called physician raiding. In 2003, UPMC hired two primary care practitioners from a West Penn hospital; UPMC admitted that it took the practitioners on in order to injure the hospital. In 2005, UPMC hired a surgical group from a West Penn hospital. In 2006, UPMC hired a radiologist, an orthopedic surgeon, a cardiovascular surgeon, and an entire vascular lab department from West Penn. UPMC was unable to absorb the cardiovascular surgeon and vascular lab staff. In 2008, UPMC took cardiovascular surgeons, cardiologists, and nine primary care physicians from West Penn. UPMC agreed to pay one of the primary care physicians roughly $500,000a figure well above the revenue generated by the physician's practice and more than four times the salary he received at West Penn. In 2009, UPMC offered Allegheny General's key bariatric surgeon a bloated salary in an attempt to hire him away. In an internal email to UPMC's CEO, a UPMC executive said that if the surgeon joined UPMC, [Allegheny General] will not have a sustainable bariatrics program unless they just merge it with [West Penn]. The executive also said that even if Allegheny General raised the surgeon's salary and persuaded him to stay, at least UPMC will have forced [Allegheny General] to incur higher costs. JA 120-21. The surgeon ended up leaving Allegheny General to join UPMC. In other instances, UPMC tried unsuccessfully to lure physicians away from West Penn. Between 2002 and 2009, UPMC attempted to hire a cardiology group, a urology group, an anesthesiology staff, a radiology staff, a premier podiatrist, and an endocrinology group from West Penn. UPMC did not need the additional physicians, and although the doctors remained with West Penn, they did so only after West Penn agreed to increase their salaries. In addition to hiring physicians away from West Penn, UPMC has pressured community hospitals into entering joint ventures with it for the provision of oncology services. UPMC told the hospitals that unless they entered the joint ventures, it would build UPMC satellite facilities next to them, draining their business. Nearly every community hospital in the Pittsburgh metropolitan area (except those owned by West Penn) acquiesced and entered a joint venture with UPMC. These joint ventures function as exclusive-dealing arrangements, i.e., the community hospitals refer all of their oncology patients to UPMC facilities. Moreover, under pressure from UPMC, many of the community hospitals have begun sending all of their tertiary and quaternary care referrals to UPMC facilities. Finally, UPMC has repeatedly made false statements about West Penn's financial health in order to discourage investors from purchasing West Penn bonds. On one occasion, for example, UPMC disseminated a book of false and defamatory information about West Penn['s] finances that was printed in a format designed to appear as if it were authored by West Penn. JA 122. The book, which was distributed to investment bankers and credit-rating agencies, gave investors a distorted impression of West Penn's financial stability. On the whole, UPMC's efforts to forestall investment in West Penn were somewhat successful. Although West Penn has been able to issue debt when necessary, UPMC's disparagement has caused it to pay artificially inflated financing costs on the debt.