Western Maryland Health System has signed a letter of intent to join UPMC in a deal that would expand UPMC's reach into a third state.
The providers are still working out exactly how the affiliation would work, but they said they expect it to close by the end of the year. They did not disclose terms.
Cumberland, Md.-based WMHS and Pittsburgh-based UPMC have had a clinical affiliation since February 2018, under which UPMC's behavioral health, oncology and cardiovascular and neurological surgery specialists practice in WMHS' acute-care hospital, WMHS spokeswoman Kate Donaghy wrote in an email.
WMHS said in a statement that the clinical partnership, which allows for mutual provider sharing, has enhanced services for residents in its coverage area. The affiliation enables WMHS to build on its value-based care capacity and reduce the cost of care, the system said.
Leslie Davis, senior vice president of UPMC and executive vice president and chief operating officer of UPMC's health services division, said in a statement that the providers are collaborating on a shared vision to preserve high-quality healthcare services closer to home for local patients and their families.
WMHS opened its only acute-care hospital, Western Maryland Regional Medical Center, in Cumberland in 2009. It also has a network of diagnostic centers, urgent-care clinics, physician practices, a skilled-nursing facility and home-care operations serving western Maryland and parts of West Virginia and Pennsylvania.
WMHS generated $1 million in operating income on $167 million in total operating revenue in the six months ended Dec. 31, 2018, according to its most recent financial filing. That's compared with $341,500 in operating income on $163 million in total operating revenue in the last six months of calendar 2017. The system recorded a deficit of expenses over revenue of nearly $1.8 million in the latter half of 2018, compared with an excess of revenue over expenses of $9.8 million in the 2017 period. Like many health systems, its 2018 non-operating performance suffered from investment losses.
UPMC is one of the country's largest integrated health systems, having drawn nearly $19 billion in operating revenue last year. The academic system is both a provider and insurer and includes 40 hospitals, 700 physicians' offices and outpatient sites and a 3.5-million member health plan. A UPMC spokeswoman declined to comment beyond a news release announcing the affiliation.
WMHS CEO Barry Ronan said in a statement that the providers are now working toward a definitive agreement, which will allow his system to maintain clinical excellence throughout the region for years to come.
"Since we became clinically affiliated with UPMC in 2018, we have a stronger clinical and operational position allowing a broad range of nationally recognized care here locally for the people of Allegany County and surrounding counties in Maryland, Pennsylvania and West Virginia," he said.
