Healthcare Business News

Pa. system aims to join Highmark network

By Melanie Evans
Posted: October 16, 2012 - 3:15 pm ET

St. Vincent Health System, Erie, Pa., would join a Pittsburgh insurer's fledgling integrated delivery network under an agreement announced Tuesday.

Trustees of St. Vincent approved a letter of intent that would add its 454-bed Erie, Pa., hospital to the network Highmark is seeking to build around its proposed acquisition of West Penn Allegheny Health System. Highmark's deal for West Penn Allegheny landed in court earlier this month after the struggling Pittsburgh health system said it would break off the agreement.

Highmark spokesman Michael Weinstein said the insurer and St. Vincent would finalize terms of the agreement in the coming months, which must then be approved by Pennsylvania's attorney general and Orphans' Court.

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Highmark is also awaiting approval for its affiliation with Jefferson Regional Medical Center in Jefferson Hills, Pa. Highmark's plans for a new parent company, which would include an insurance subsidiary and another subsidiary for provider operations, is also undergoing regulatory review. West Penn Allegheny, Jefferson Regional Medical Center and St. Vincent would operate under the provider subsidiary.

Under the agreement with St. Vincent, Highmark agreed to invest $25 million in St. Vincent, including $5 million for capital projects and pledged investment of more than $40 million after the close. Highmark entered the agreement with St. Vincent to maintain competition in the Erie healthcare market and bolster local healthcare delivery, Weinstein said.

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