PITTSBURGH (KDKA) – West Penn Allegheny Health System said it needed a partner with lots of cash on Tuesday.
They said they found that partner in Highmark, a major health insurance company in this region.
Today, the boards of both companies signed off on a deal which, in essence, means that Highmark will buy West Penn Allegheny.
The auditorium at Allegheny General Hospital was crowded when West Penn Allegheny confirmed that Highmark will take over this region’s second largest healthcare provider.
“For us, it could not have been a better fit, and it could not have come at a better time,” West Penn Allegheny Board Chairman David McClenehan said.
McClenehan said a lot was at stake.
“There would be no West Penn Hospital come September had this transaction not occurred.”
Highmark, the region’s largest health insurer, is pumping money into West Penn Allegheny. They will spend $50 million immediately to shore up West Penn Hospital and Forbes Hospital, $350 million over the next four years to strengthen the health system, and $75 million in medical scholarships.
Highmark CEO, Dr. Ken Melani, said all insurers and their patients would have access to West Penn Allegheny hospitals.
“We will make our system available to any insurer that desires to have a contract, including UPMC, to assure that patients have uninterrupted access to their health care providers.”
At a press conference following, Melani said Highmark’s purchase will save some 11,000 jobs.
“This is a system that is going to grow. It is only going to grow. So from that perspective, this will be a win for the community in terms of overall job growth over time,” Dr, Melani said.
Sources: Highmark In Talks To Buy West Penn Allegheny Health System (April 12, 2011)
Highmark, UPMC To Part Ways (June 15, 2011)