Highmark Health names new board chairman
Highmark Health intends to step up competition with UPMC, even though the state's largest health insurer would welcome contract discussions with its rival, the company's newly appointed chairman said Thursday.
“I don't think it would be good for Pittsburgh to have only one provider network. There needs to be some level of competition, and there needs to be some choice. We're simply committed to trying to give individuals that choice,” Highmark Health board chair and banking executive Joseph C. Guyaux told the Tribune-Review.
Guyaux, senior vice chairman of The PNC Financial Services Group Inc. and president and CEO of PNC Mortgage, succeeds longtime chair J. Robert Baum, who is retiring.
Guyaux inherits a highly visible role at a time when UPMC, the region's largest health care provider, ended a billion-dollar contract with Highmark. UPMC has repeatedly said it has no plans to enter into a new agreement with the insurer.
“I don't know where to go from there,” Guyaux said about UPMC's public stance. “Over time, you would hope that people would look at what's in the best interest of the community, not just necessarily your own company.”
UPMC officials declined to comment.
Guyaux, 64, is not new to Highmark's board. He served on the board between 2004 and 2012 and left soon after former CEO William Winkenwerder joined to focus on a new job as PNC's chief risk officer. He started at PNC in 1972 and has held several leadership roles.
Guyaux's financial background should be helpful for Highmark, which acquired West Penn Allegheny Health System, now Allegheny Health Network, in 2013, said Stephen Foreman, professor of health care administration at Robert Morris University.
“The challenges facing Mr. Guyaux are daunting,” Foreman said. “How will he lead Highmark's board when the full implications of competition play out? What happens if that competition prompts substantial losses at West Penn Allegheny or Highmark's insurance business? Will he and the board demand real accountability from Highmark's management, or will the board merely be a rubber stamp for management's policies?”
Guyaux said Highmark has a capable CEO in David Holmberg to run the company's day-to-day operations. Holmberg also will become chairman of the board of Highmark Inc., the company's insurance arm. Highmark Health is the parent company of Highmark Inc. and Allegheny Health Network, the hospital chain that includes Allegheny General Hospital in the North Side.
The leadership changes took effect Wednesday, officials said. Baum will continue to serve as a member of the board of HVHC, Highmark's vision affiliate. Highmark Inc. in 2013 paid board directors $62,000 to $104,000 a year, records show. Baum received $124,000 a year.
In addition to Guyaux, PNC General Counsel Gregory B. Jordan is on the Highmark Inc. board. PNC in 2014 loaned West Penn Allegheny $700 million so that it could buy back bonds from Highmark. The insurer acquired the bonds as part of its deal to buy the hospital system.
Guyaux, who lives in Fox Chapel and was born in Tarentum, has strong ties to Allegheny Valley Hospital in Natrona Heights, one of the seven hospitals in the Allegheny Health Network. As young parents in the early 1970s, he and his wife could hardly afford the hospital bill after the birth of their first son.
“The hospital actually let us pay our bill $10 a month at a time with no interest. We didn't have the money,” he said.
As a gesture of thanks, Guyaux and his wife, Kathleen, gave the hospital $400,000 toward a new emergency department that opened in 2010.
Guyaux said he envisions a health care system that is lower in cost and higher in quality. He said he fears companies might decide to leave the region if it's too expensive for business.
“I hope my kids and grandkids, and eventually my great-grandchildren, grow up in this area, and I want it to be affordable, and I want employers to want to come here. At the end of the day, that's who's paying. It's the individuals and the companies that are paying the insurance companies and the hospitals and the doctors.”
Luis Fábregas is Trib Total Media's medical editor. He can be reached at 412-320-7998 or lfabregas@tribweb.com. Staff writer Alex Nixon contributed to this report.
