Highmark to Acquire WPAHS

Margaret Dick Tocknell, for HealthLeaders Media , June 29, 2011

The announcement ends months of speculation surrounding the future of the financially ailing not-for-profit WPAHS, which posted a $38.4 million operating loss in FY 2009 and $49 million loss through the first nine months of FY 2011.

The health system, which employs 13,000, includes five hospitals that admit about 79,000 patients annually, and a physician group. It has a deal with Temple University School of Medicine in Philadelphia to open a four-year medical school in Pittsburgh.

Highmark is an independent licensee of the Blue Cross and Blue Shield Association. It serves 4.8 million members in Pennsylvania and West Virginia.

The deal with WPAHS must still receive approval from state and federal agencies, including the federal Department of Justice. Officials hope the acquisition will be fast-tracked and completed within six months.

During his comments at the announcement, David L. McClenahan, West Penn Allegheny's chairman said that without the acquisition the health system was looking at shutting down West Penn Hospital by September of this year.

McClenahan said the hospital system had been looking for a partner for some time and that although there were for-profit suitors, the system "takes it non-profit mission seriously and preferred to remain a nonprofit."

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