Rivals UPMC and Allegheny Health Network traded sharp words Friday over UPMC's proposal to build a hospital less than a mile from AHN's Jefferson Hospital in the South Hills.

UPMC officials said the proposed 300,000-square-foot hospital would improve access to care and decrease costs for its patients who live in the area, but AHN officials said the proposal attempts to undermine a successful community hospital.

The proposal, filed with Pleasant Hills on Dec. 18, is scheduled to go before the borough's zoning hearing board Tuesday.

UPMC spokesman Paul Wood said in an email that the hospital, if approved, would allow patients to “access the UPMC care they want closer to their homes” while promoting competition.

“Patient services improve and prices decline when there is enhanced competition,” Wood said.

AHN spokesman Dan Laurent said the proposal shows UPMC is trying to monopolize health care in the region.

“Building a new hospital 3,000 feet away from an existing hospital isn't about competition,” Laurent said in an email. “It's about a blatant, costly duplication of services, and a misuse of community resources. It's a predatory action meant to weaken Jefferson and to a lesser extent other providers in the market.”

The hospital would be built in a vacant space just northwest of Jefferson Hospital, off Pennsylvania Route 51 near Lindsay Snyder Drive in Pleasant Hills, said Jim Rush, Pleasant Hills code enforcement officer. If the borough's zoning board approves, the proposal would still require authorization from the planning commission and council.

Highmark Health, which owns Allegheny Health Network, has invested more than $100 million in Jefferson since Highmark acquired it in 2013, said Jefferson CEO Louise Urban, adding an obstetrics unit and cancer center and expanding its surgery center.

“We have just about everything that would be needed in a community setting,” Urban said.

About 64 percent of Jefferson's 341 inpatient beds are typically filled, indicating no need for added capacity in a community that is not growing, she said.

But Wood said many UPMC patients living along the Route 51 corridor travel to UPMC facilities for care and would benefit from a closer hospital. He noted that Highmark acquired Jefferson and formed Allegheny Health Network to compete with UPMC.

“Choice, even close by, is vital to a healthy competitive environment assuring that all providers offer the highest quality at the lowest cost,” Wood said.

Laurent, when asked whether AHN might pursue legal or regulatory intervention, said the system is “considering (its) options.”

The state Attorney General's Office has intervened in the past when proposed hospital mergers threatened to weaken competition — a different scenario than the one in the South Hills.

“Typically, adding capacity is pro-competitive, so the antitrust authorities tend to view the addition of capacity as positive, and positive for consumers,” said Mike Cowie, a former Federal Trade Commission antitrust specialist who headed the agency's task force on hospital mergers.

On its website, UPMC says it has a 60 percent market share in Allegheny County. Cowie said there is no specific percentage threshold at which a hospital system would become a monopoly.

Laurent questioned whether UPMC might close its hospital in nearby McKeesport if it were to open a hospital in the South Hills. As precedent, he noted that UPMC closed a hospital in Braddock in 2010 after announcing plans to open UPMC East in Monroeville, about a mile from AHN's Forbes Hospital.

“Jefferson will survive, however, just as Forbes Hospital survived UPMC building its Monroeville hospital less than a mile away,” he said. “As with Forbes, Jefferson will continue to be the primary provider of comprehensive medical and surgical care in the Jefferson and Pleasant Hills region.”

Wood said, “UPMC has made significant investments in and will continue its strong commitment to UPMC McKeesport.”

Wes Venteicher and Ben Schmitt are Tribune-Review staff writers. Reach Venteicher at 412-380-5676 or wventeicher@tribweb.com. Reach Schmitt at bschmitt@tribweb.com or 412-320-7991.

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