Johnstown, Pa.'s two hospitals have taken a step toward merging. Conemaugh Health System, the parent company of 339-bed Conemaugh Memorial Medical Center, has signed a letter of intent to begin due diligence with the University of Pittsburgh Medical Center in a process that could eventually lead to the purchase of UPMC Lee Regional Medical Center. The agreement marks a breakdown in negotiations between UPMC and 212-bed Lee, which was hoping to regain independent control after six years under the UPMC corporate umbrella. "We thought UPMC was negotiating in good faith. However, it appears that they continue to use accounting that includes inaccurate claims and unreasonable demands," Lee officials said in a news release. The system is "considering all options," including litigation, said Dan Mulholland, an attorney for Lee. Meanwhile, officials at five-hospital Conemaugh stressed in a news release that the letter of intent was not an agreement to merge, but merely enabled both sides to share financial data and other information to determine how best to proceed. The relationship between Johnstown's hospitals has been debated locally for some time. In late May, Conemaugh offered to pay $58 million to buy Lee. "If both hospitals continue to operate independently they may survive, but we will not have the world-class medical center that we are capable of having with a merger," Conemaugh officials said. UPMC officials said contractual obligations barred them from commenting. -- by Cinda Becker
Conemaugh, UPMC sign letter of intent
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