Pittsburgh's largest community health system said it will merge with Allegheny Health, Education and Research Foundation, the state's largest integrated delivery system, in a move to enhance both systems' competitive positions.
Forbes Health System, through a noncash transaction, becomes the first member of a new AHERF subsidiary called Allegheny University Medical Centers. The subsidiary is AHERF's vehicle for assembling a regional network of hospitals, health systems and ambulatory-care centers.
Barry H. Roth, who has been president of Forbes since 1985, will become the not-for-profit subsidiary's president and chief executive officer.
Forbes, a two-hospital system that includes skilled-nursing, residential, hospice and ambulatory care, will merge its $220 million in assets into the new subsidiary. The consolidation with AHERF, which represents more than 2,600 licensed beds, 1,400 faculty members and 15,750 full-time-equivalent employees, is expected to become effective by January.
Forbes continues as a member of Pyramid Health, an integrated delivery network of affiliated hospitals, which is anchored by Allegheny General Hospital, AHERF's Pittsburgh-area flagship.
Forbes will be dissolved as a corporation, and some of its trustees will join a new AUMC board, said Jack C. Frank, a vice president and spokesman for the Pittsburgh-based system.
AHERF's latest maneuver is part of an overall strategy to create a delivery system designed to be attractive to managed-care payers. In announcing the Forbes deal last week, AHERF President and CEO Sherif S. Abdelhak indicated he is prepared to pursue other similar full-asset mergers.
"We have expressed our position, which includes financial consolidation, to all of our current partners, and are prepared to progress in our discussions with each of them when they are ready," he said.