Labor groups allege UPMC used market power to suppress wages

Pennsylvania labor groups filed an antitrust complaint with the Department of Justice (DOJ) against the Pittsburgh-based University of Pennsylvania Medical Center (UPMC) last week for allegedly using its strong market presence in the state to suppress wages and harm workers.

Pennsylvania’s largest healthcare union, SEIU Healthcare Pennsylvania, and labor group the Strategic Organizing Center claimed that UPMC nurses have lower wages and heavier workloads than those at other hospitals, and that the system prevents employees from leaving over fears of being “blacklisted” from other healthcare jobs in the area.

UPMC operates 40 hospitals with 95,000 employees statewide and holds 45% of the medical-surgical market share in western Pennsylvania. The health system reported $26 billion in operating revenue in 2022, according to a press release.

The complaint is the first of its kind to argue that these mobility restrictions violate antitrust laws, SEIU Healthcare Pennsylvania President Matt Yarnell said at a press conference last Thursday.

“We have seen firsthand how UPMC has grown more and more dominant in Pittsburgh and across our commonwealth, how UPMC has used its dominance to keep ratcheting down wages and staffing levels for workers, and UPMC is locking in these poor conditions with mobility restrictions, and through suppressing workers attempts to organize for better,” Yarnell said.

The complaint is based on a nine-month investigation and wage study, which found wage penalties for UPMC staff. For every 10% increase in UPMC’s market share, UPMC workers saw, on average, a 30 to 57 cents per hour decrease in pay relative to other comparable hospital employees, according to the study. Compared to all general hospital worker categories, UPMC paid employees 2% less than comparable health systems, the study found.

The health system’s average wage is over $78,000, according to UPMC.

“There are no other employers of size and scope in the regions UPMC serves that provide good-paying jobs at every level and an average wage of this magnitude,” UPMC chief communications officer Paul Wood told Healthcare Brew.

At the press conference, UPMC nurse Jodi Faltin said she has seen her workload increase during her eight-year tenure at the health system.

As of 2020, UPMC staffing ratios are an average of 19% lower than those at other health systems. The staffing ratios are lowest in areas where UPMC has the highest market share, according to the complaint.

“Now in 2023, there’s rarely a shift that we don’t worry about staffing,” Faltin said. “Driving into work, our minds are full of questions: ‘Will we have to take on extra patients? Will we be pulled to an unfamiliar floor? Will we have to work unsafely to give our patients the care they need?’”

Nurses at UPMC are allegedly afraid to raise issues on safety concerns as “UPMC could retaliate against them, going so far as to terminate their position and prevent them from being rehired,” Faltin said.

“There is no policy that prohibits someone who leaves employment at a UPMC facility from being hired by another UPMC facility,” Wood told Healthcare Brew in an email.

Half of UPMC employees reported they believed UPMC would bar them from being rehired if they left their job, according to a survey of 555 UPMC employees included in the antitrust complaint. Some workers reported that “when they left their jobs at a particular unit in UPMC, they were barred from working throughout the entire UPMC healthcare system,” according to the complaint.

“There is no specific timeline” for when the DOJ will respond to the complaint, but the labor groups hope that “they act quickly,” said Marka Peterson, legal director and associate general counsel for the Strategic Organizing Center.