Sources: Highmark In Talks To Buy West Penn Allegheny Health System

PITTSBURGH (KDKA) — Talks are in the works that could change the way millions of local people get their health care.

Sources tell the KDKA Investigators that the region’s largest insurance company, Highmark, is in negotiations to buy the region’s second largest medical provider, West Penn Allegheny Health System.

With more than 4.8 million subscribers, Highmark is the biggest insurance provider in the market. By purchasing West Penn Allegheny and becoming a health care provider, Highmark would put itself in direct competition with UPMC which already operates a health care system and provides insurance to more than 1.5 million members.

KDKA Investigator Marty Griffin’s sources say Highmark would purchase the West Penn Allegheny System for $500 million. In a statement, UPMC says: “UPMC strongly supports more choice and competition in both the insurance and provider markets as it ensures the best value of care at the lowest possible cost.”

If Highmark does transition into a payer-provider in direct competition with UPMC, it would fundamentally change the region’s health care system and could represent a benefit for employers and subscribers alike.

But if the deal goes through, it would mean that Highmark subscribers would no longer have access to UPMC doctors and facilities after Highmark’s contract with UPMC runs out in 15 months.

Beginning July 1, 2012, UPMC care would only be available through the UPMC Health Plan and a number of national insurers such as Cigna, Aetna and United Health Care.

Insiders say the upside is that possible competition could drive down the cost of health care.

More Health News
More Business News
More Reports By Marty Griffin
West Penn Allegheny Health System


One Comment

  1. Heather Zawrotny says:

    We need more health insurance competition in Western PA. Allowing CIGNA, UHC, and Aetna to compete is this market is a positive change. UPMC Health Plan is only an option for employers that have most of their employees residing in Western PA, and Health America does not have all of the UPMC tertiary hospitals in their network. Because of these shortcomings, Highmark has dominated the Western PA market for years and that is not in the best interest of employers who purchase health insurance for their employees.

  2. john says:

    I work at UPMC this is a done deal

  3. carol rogers says:

    Ah, the art of negotiation!! Funny the upmc contract will be up and this is ‘floated’ around. Interesting.

  4. patrick says:

    Done deal. Remember the lawsuit West Penn Alleghaney has against Highmark and UPMC. I believe the purchase of the system would make the lawsuit go away and further more I feel UPMC is helping Highmark foot some of the bill. I always felt that this lawsuit had legs to it. It would be a win win situation for everybody involved.

  5. John carpenter says:

    What about the tens of thousands of children, including my 6yr old cancer survivor, that need access to Children’s Hospital? This needs to be a serious consideration. Their specialty care is just not available at other Pittsburgh based hospitals.

    1. PghProud says:

      Children’s Hospital accepts ALL insurance. Even if you work at a hospital other than UPMC children’s is always considered in network no matter what type of insurance you have. Since there is only one hospital in Pittsburgh that specializes in pediatric care they must be in network with all health care entities.

    2. PattyS says:

      This is huge. All parents take note.

  6. John Q Public says:

    it would be a major problem for folks that are exclusively in the UPMC system of doctors and years of test results, especially for chronically ill and cancer survivors records are in the UPMC system . Access would be denied if you are currently a HighMark subscriber. Previous conditions being treated could be denied.
    This could be the biggest medical mess this region will have ever seen.A forced change to a provider that would be acceptable to the UPMC system would be necessary. UPMC has the largest network of hospitals and treatment centers world wide. To opt to be a part of the lessor giants treatment centers (hospitals) would be a downgrade in availability and quality of service. There just would be no comparison. Do the words medical privacy violations enter into this too ? Would it be proper for a health insurer to have full access to your complete medical records provided by a hospital system they would own. ?
    Many questions need answered, please, before this could be allowed to happen.

    1. PghProud says:

      But if you went to Ohio Valley or Allegheny General Hospital your entire life and your employer changed to UPMC health plan and suddenly you HAD to go to upmc facilities that would be okay? The door swings both ways. This is preventing UPMC from creating any further monopoly in our region. It’s good to have a choice and if this “forced change” doesn’t happen soon you will not have a choice in providers. Speaking of “medical privacy violations” didn’t UPMC post radiology reports with patients social security numbers online for the general public to view? That’s when I stopped going there. Not to mention they have not received a top 100 hospitals in the nation award in years due to their hospital acquired infection rate…which is the highest in the region btw. Oh and UPMC health insurers HAVE full access to your medical records as well. Downgrade of services? Tell that to my grandfather who had to watch the doctors at presby stab a hole through my grandmothers lung when they tried to drain it. She didn’t need to die. But they sure did help. Quantity doesn’t justify QUALITY.

  7. TD says:

    Trust me. UPMC does not work and play well with others. As an employee of WPAHS we see it every day. Don’t be fooled! The only thing UPMC wants is for any other health care delivery system in the region to disappear. It’s still appalling that they were permitted to erect a hospital a mile away from Forbes Regional in Monroeville. Whatever laws exist to prevent monopolies, UPMC always finds some loophole to get around it. This could be very good for this region, no matter what kind of health insurance you may have.

    1. Mike A. says:

      Your comment is somewhat ironic in that if no one was allowed to build a hospital to compete with Forbes, it would be Forbes who had the monopoly.

      1. LD says:

        Mike A – Please. UPMC closes Braddock Hospital and abandons a community with no other healthcare resources and then opens a brand new hospital in a community one mile from its competing hospital. To suggest a Forbes is a monopoly because its the only hospital in MONROEVILLE is just absurd. Then UPMC purchases Hamot in Erie and will soon be turning its predatory eyes on the other hospital in that community – St. VIncents. It’s about time Pittsburgh wises up to the intentions of UPMC – to eliminate choice. Finally, a formidable competitor stands up to them. Our city will be better for it.

  8. David Hughes says:

    Please tell me, how does this increase competition?

    1. Jim says:

      If Highmark controls 65% of the non-government plan business and they decide to only contract with 50% of the hospitals and doctors (instead of virtually 100% currently) don’t you think they will have far more leverage in their pricing negotiations with those providers?

  9. U. P. Uras says:

    The powers that be have destroyed a great organization over the years. WPAHS has nowhere to go but up!

  10. Jim says:

    Marty just assumes that the UPMC facilities and doctors would not agree to contract with Highmark in July, 2012. Most UPMC facilities and doctors would not survive if they lost 65% of their non-government plan payers. Highmark needs to develop a limited network product in order to compete when the Exchanges (promised in Health Reform)open up. WPAHS is the obvious, and only other choice, for Highmark to build that limited network around. Anyone remember Community Blue?

  11. Dottie D says:

    For all the clients of UPMC doctors that have Highmark this would be a disaster. My husband currently sees 5 specialists & his records are all at UPMC. Hopefully this will not happen!

  12. EarCam says:

    “But if the deal goes through, it would mean that Highmark subscribers would no longer have access to UPMC doctors and facilities after Highmark’s contract with UPMC runs out in 15 months” WHY is this a logical conclusion? The author provides nothing to back up this statement…

  13. Kaiser Soze says:

    This is less competition. Highmark subscribers can now go to UPMC facilities. If they’re no longer permitted to do so and are restricted to WPAHS facilities, that is less competition. The terms “restricted” and “competition” are mutually exclusive.

  14. TD says:

    Just remember that it’s UPMC who will refuse to treat Highmark’s patients. UPMC wants it all and the move of refusing treatment should show everyone that for them, it’s all about doing it their way or no way. They’ll just take their ball and go home!

  15. RU kidding says:

    Thank you EarCam and Jim. Highmark and UPMC are too co dependent on each other to not allow their customers to access the other. And there are services that aren’t available at West Penn Allegheny that have to be made available, such as inpatient and other services at Childrens of Pittsburgh
    David, competition will be increased since West Penn Allegheny will finally have a fighting chance against the UPMC behemoth.
    TD–I agree!!

  16. Employer and employee says:

    The real issue of the most recent smoke and mirrors of the health care industry is not who owns what. The real issue is that the relationship between the patient and there doctor is further lost with the continued evolution of corporate medicine as well as the lack of choice of the insurance user vs. The insurance purchaser, your employer.
    The private physician offices cannot compete with corpoately owned groups due to cost burdens fron government regulation and insurance requirements. Think pep boys vs. The old corner mechanic. Likewise think of personal service of local business vs. Corporate customer service.
    Since your employer buys the insurance the insurer only needs to please them and their stockholders not the patient.
    Bottom line large corporate entities found a way to skim and squeeze money out of what use to be a private interaction between a patient and their physician to the detrement of the quality and cost of health care for all. Until patients wake up and fight for the right to decision and choice in care ones best option is to hope they never become ill.

  17. larry says:

    notwithstanding all of the comments about what patients can go where; there is another issue: in 2008 & 2009 Highmark spent untold & unknown millions of their dollars on the failed merger with IBC. Highmark plans to spend at lease $500 million dollars on this deal. Who do you think paid for the failed merger, and will pay for the new one? the subscribers, as Highmark will go the the PA Department of Insurance and ask for rate hikes; again and again and again.

  18. larry says:

    Exactly. And when other insurance carriers enter the Pittsburgh market and contract with UPMC….what will Highmark have left to sell its customers? Access to WPAHS. Not much of an option. Highmark- get ready to blink.

  19. carol rogers says:

    Both sides are posturing…its a chess game. UPMC would have a difficult time without the Highmark weekly payment. It would be very hard to survive on Medicare/Medicaid reimbursement and the few national payers on the scene in Pittsburgh. Why won’t Highmark consider partnering with UPMC? They are so much more advanced with technology and expertise. WPAHS has proved they are not a good financial managera. Their pension plan is severly underfunded. Will Highmark foot the bill for that? How does that equate to health care dollars for Western Pennsylvanian’s.? Employer groups need to be very careful. You will be lured into low rates for a year or so and then they will go right back where they are. Stay tuned!

  20. Michael N. says:

    This worries me deeply and I am completely against it. My wife has been having treatments at Hillman and Shadeyside for 6 years now for stage 4 Pancreatic Cancer.

    Should this deal happen and contracts in place at other hospitals expire without being renewed….my wife will die sooner than she has to and that is a fact, period.

    I am against it on every level and I will tell anyone how I feel.

  21. 3riversprincess says:

    lets face it…UPMC needs Highmark and Highmark needs UPMC

  22. carol rogers says:


  23. Kathleen says:

    Health Insurance should not be for profit it is a matter of life and death.
    I read West Penn was going to open a medical school?

  24. Shawn says:

    Hopefully, this deal goes through. UPMC is behind West Penn Allegheny is many areas including innovation and especially oncology. UPMC often sends patients with no insurance or low quality insurance to WPAHS and WPAHS never sends them away as UPMC does. UPMC has become just another ugly predary corporate behemoth.

  25. Michael N. says:

    I have to debate that claim with you Shawn, it is simply not true that they are ahead of UPMC in Oncology.
    I promise you that I research endless hours and would have switched to AG if that was true. I went to AGH early in our 6 year fight thus far and spent a couple hours having her evaluated and they said point blank, you need to stay at UPMC and this had nothing to do with insurance.
    I have gone as far as Switzerland with mu wife several times for treatments. This is going to be a very bad thing just like when Highmark started a pharmacy and locked out any other source for specialty drugs with their contracts. Now we are stuck with Medmark and it has not been good.
    History is about to repeat itself and some will simply die as a result.

Comments are closed.

More From CBS Pittsburgh

Play It
Get The All New CBS Local App

Listen Live