Highmark Receives Approval For West Penn Takeover

PITTSBURGH (KDKA) -- Hundreds of West Penn Allegheny employees cheered the announcement that the Pennsylvania Insurance Department has signed off on that health system's affiliation with Highmark, this region's largest insurance company.

"This is a great day. This is an historic day. This is an exciting day," declared Dr. Bill Winkenwerder, CEO of Highmark.

Winkenwerder and officials from West Penn Allegheny saluted the approval of the nearly one billion dollar acquisition of West Penn Allegheny, creating a new system called the Allegheny Health Network that also includes Jefferson Regional and soon St. Vincent Hospital of Erie.

"Western Pennsylvania has been given the opportunity to create a new model for health care delivery and financing that when we do it right will set the template for the entire country," noted John Paul, the president of the new Allegheny Health Network.

First is patient care.

"I think the care that we deliver is excellent. It can only get better with our affiliation," said Rick Miller, an Allegheny General pharmacist who was in the audience.

And it also means a quality alternative to health care giant, UPMC.

"I think this is good news for everyone. Consumers would like more of a choice, and this provides them more of a choice," noted Dr. Rachel Hughes-Doichev, a cardiologist.

And with new ads set to promote the Allegheny Health Network, the goal is to attract more patients by accepting those covered by all insurance plans.

"Plan on having a new way to deliver health care, efficiently, economically, and safely," said Dr. Thomas Campbell, an emergency medicine physician.

The health care professionals at West Penn Allegheny pride themselves on high quality medical care. Now they get a chance to prove it.

"This is absolutely great news for the patient. It gives us something to look forward to. We work very hard on quality. Highmark will support us in the quality we already give at the bedside. It's just a joint effort, and it's just an improvement for everyone," Angela Costa, RN, director of nursing at Allegheny General told KDKA money editor Jon Delano.

The Insurance Department's sign-off on Highmark's billion dollar merger with West Penn Allegheny, with $475 million to upgrade the health system, sets up a competitive challenger to UPMC.

John Paul, now president of the Allegheny Health Network, is a former UPMC executive.

"We will ensure choice. We will ensure convenient access to high quality and innovative services," Paul noted.

Can AHN compete against UPMC?

"Absolutely," said Dr. Campbell. "That's the plan by creating new ways, innovative ways in a cost-effective way."

In a statement, UPMC said it welcomed that competition but said Highmark's entry into the health care business "complicated" insurance choice, warning those insured by Highmark's insurance plans will not be able to use UPMC doctors and hospitals after December 31, 2014.

"There will be no new UPMC contract or extension when the current one expires in just 19 months," warned the statement.

Beginning in 2015, says UPMC, if you are insured by Highmark you cannot use UPMC doctors or hospitals except at a higher out-of-network cost.

UPMC says now that Highmark wants to compete against UPMC in health delivery, it's just part of the competition battleground.

Highmark officials didn't want to talk about this today -- saying their focus is on making the new Allegheny Health Network the best in the region -- even acknowledging that some UPMC doctors want to join them.
Gov. Tom Corbett has praised the approval, as well as Sen. Jay Costa who spoke with NewsRadio 1020 KDKA.

• Listen to Sen. Costa on NewsRadio 1020 KDKA:

"I am very pleased with the decision by the Insurance Department to permit the affiliation of Highmark and WPAHS," Costa said in a statement. "This affiliation is critical to a fair, competitive and robust health-care service delivery system in Southwestern Pennsylvania."

Costa also went on to say that he hopes that the takeover is just the start of healthcare reform in Pittsburgh.

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