The insurer announced in June plans to acquire West Penn Allegheny and pour $400 million into the system to bolster competition for the University of Pennsylvania Medical Center.
However, prolonged negotiations since June have pushed the partners past an announced date to seek regulatory approval for the deal. West Penn Allegheny spokeswoman Kelly Sorice said the system expects to announce a definitive agreement “very soon” though she declined to give a date.
Financial statements for West Penn Allegheny show its patient revenue dropped 3.8% to $1.5 billion in fiscal 2011 but its expenses, before restructuring costs, declined just 1.1% to $1.6 billion. Management attributed the drop in patient revenue to efforts to consolidate its hospitals, the economy and construction delays and more patients who stay for observation but are not admitted to the hospital, said financial records. Highmark accounted for one-fourth of West Penn Allegheny's 2011 revenue.
West Penn Allegheny lost $9.5 million on operations in fiscal 2010 before another $70 million impairment loss and $11.8 million loss from restructuring. The system ended 2010 with a net loss of $63.1 million.