UPMC, Pin­na­cleHealth agree to af­fil­i­ate

Modern Healthcare - - REGIONAL NEWS - —Shelby Liv­ingston

Penn­syl­va­nia health sys­tems UPMC and Pin­na­cleHealth Sys­tem an­nounced last week they have agreed to af­fil­i­ate.

Pin­na­cleHealth, based in Har­ris­burg, also said it will ac­quire four Penn­syl­va­nia hos­pi­tals and med­i­cal cen­ters from Com­mu­nity Health Sys­tems in a sep­a­rate trans­ac­tion.

No fi­nan­cial terms were dis­closed for ei­ther deal.

Pin­na­cleHealth said the af­fil­i­a­tion with Pitts­burgh-based UPMC, which has more than 25 hos­pi­tals and a not-for-profit health plan, would al­low the sys­tem to ex­pand its health­care ser­vices and ad­vance qual­ity ini­tia­tives while pro­vid­ing more health in­sur­ance op­tions for pa­tients. The three-hospi­tal sys­tem said it has been ex­plor­ing a “col­lab­o­ra­tive re­la­tion­ship” with other providers.

In Oc­to­ber, Pin­na­cleHealth aban­doned its pro­posed merger with Penn State Her­shey (Pa.) Med­i­cal Cen­ter after the 3rd U.S. Cir­cuit Court of Ap­peals re­versed a lower court rul­ing in fa­vor of the merg­ing health sys­tems.

“Hav­ing Pin­na­cleHealth af­fil­i­ate with UPMC is an ex­cit­ing op­por­tu­nity for the sys­tem and cen­tral Penn­syl­va­nia,” Pin­na­cleHealth CEO Philip Guar­neschelli said in a state­ment. “Pin­na­cleHealth has been ex­e­cut­ing on its vi­sion for the fu­ture of health­care in the re­gion. Af­fil­i­a­tion sup­ports ge­o­graphic ex­pan­sion and in­tro­duces more choices for health in­sur­ance through a provider-spon­sored health plan.”

UPMC posted op­er­at­ing rev­enue of $13 bil­lion in 2016, while Pin­na­cle’s to­tal rev­enue in 2015 was $1.07 bil­lion, ac­cord­ing to fed­eral fil­ings.

Com­mu­nity Health Sys­tems is ne­go­ti­at­ing to sell 25 of its 158 hos­pi­tals and other as­sets with the hope of rais­ing about $1.8 bil­lion in net pro­ceeds from those ef­forts.

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