UPMC, PinnacleHealth agree to affiliate

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.