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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.