Reporting Jon Delano
PITTSBURGH (KDKA) — For many who have followed this dance between the local healthcare giants — it sometimes seems like we just keep going around in circles.
But Friday’s announcement does carry some risks for those served by West Penn Allegheny — even if that risk is not yet measurable.
Even after West Penn Allegheny announced they had cancelled their agreement with Highmark, helicopters still took off from the hospital — just business as usual for doctors, nurses, and others who serve patients in this region — including newly recruited personnel.
“These are outstanding clinical leaders who are dedicated to the patients here at the West Penn Allegheny Health System,” says Dr. Keith Ghezzi, the interim president of West Penn Allegheny, “and we have received no indication that they intend to change their plans.”
At least in the short term, nobody thinks the announcement will impact those served by West Penn Allegheny.
Jim McTiernan of Triad USA advises organizations on health care options in this region, and he says there’s no need for panic.
“We absolutely should care but there’s no need to react one way or the other right now. The market will not change — it will not change I believe through 2013,” McTiernan told KDKA money editor Jon Delano.
McTiernan says his advice to clients today is simple: “Let’s just watch this. Let’s not overreact now. Let’s wait and see how things develop.”
As for whether this will increase the cost of health care to consumers, McTiernan says, “I do not believe so in the short run. In the long run, depending on what our market looks like, that remains to be seen.”
As for Highmark, McTiernan says the new management of that insurance company may rethink moving into the health care provider market which might open the door for Highmark and UPMC to get back together again.
“It very well could be or it could widen the rift between them,” he adds.
A lot depends on both what Highmark does in the months ahead — will it continue to find ways to compete against UPMC’s health delivery or not?
As for West Penn Allegheny, they must now actively find a partner — to help them survive.
“Any potential suitor would be very interested in the assets of the West Penn Allegheny Health System the way they’re currently configured,” says Dr. Ghezzi, interim president.
Lots of great assets perhaps — but also hundreds of millions of dollars in debt.
Under their agreement with Highmark, West Penn Allegheny hasn’t been allowed to look for any partners. But all that has changed. While officials won’t talk about this, the real question is — what kind of partner can help West Penn Allegheny survive?
“I think anybody and everybody is open for discussion,” says McTiernan. “And I think they would look for someone that would give the opportunity to remain independent, to remain viable, and to grow and prosper.”
And that means cash, too.
McTiernan says the likely partner will be another health care provider, not an insurance company like Highmark.
Some models of those who have partnered recently include Steward Health Care System that has partnered with hospitals in New England and Vanguard Health System which is pumping $1.5 billion into the Detroit Medical System.
Two closer health systems that could be potential partners — Geisinger Medical System in central Pennsylvania or the Cleveland Clinic
The latter is intriguing because UPMC has recently partnered with other hospitals in Cleveland, and the chance to compete against UPMC might be enticing.
“When there’s a giant, there’s always other people that want to enter a market,” notes McTiernan.