Health insurer Highmark, Pittsburgh, said it will donate $25 million to Penn State Universitys medical center as part of a 10-year partnership that will also make it the exclusive administrator of the universitys health insurance benefits.
This new agreement will not only improve the quality of healthcare for Penn State employees and their families and increase access and affordability to much-needed services, it also holds tremendous promise for medical research and care for patients, Penn State President Graham Spanier said at a news conference announcing the deal.
Under the agreement, Highmark will invest $20 million in a new, free-standing childrens hospital that 437-bed Penn State Milton S. Hershey (Pa.) Medical Center plans to build in coming years. It will also commit $5 million to support cancer research and collaborate with the hospital on community health initiatives, including wellness and prevention programs. The deal also calls for Highmark to take over the administration of Penn States health plan, which covers nearly 60,000 employees, retirees and dependents, starting in 2008. The contract is currently held by Capital Blue Cross, Harrisburg, Pa.
Highmark said its two contributions to the medical center were not contingent on securing the insurance contract. At no point was there any tradeoff between the three pieces, Highmark President and Chief Executive Officer Kenneth Melani said during a news conference. Last year, Penn State-Hershey moved all its 5,100 full-time employeesformerly covered under one of three point-of-service plansinto high-deductible, account-based plans to rein in its fast-rising benefit costs. -- by Laura B. Benko