Highmark Health, Penn State Health agree to join forces
Penn State Health Rehabilitation Hospital in Hershey.
As part of the agreement, Highmark Health will provide financial and operational support for the College of Medicine, although more detailed terms of the deal were not released.
Highmark also has agreed to contribute to Penn State Health’s plans to invest more than $1 billion over the next five years in a community-based health care network “to extend our care into the communities of Central Pennsylvania,” said Penn State Health CEO A. Craig Hillemeier.
“Our goals are to expand Penn State Health community-wide network to enhance access to care in Central Pennsylvania, to assure that the leading edge research taking place at Penn State College of Medicine and our university medical center, Hershey Medical Center, is available throughout the region.”
In a release, Highmark Health President and CEO David Holmberg called the agreement“a game changer.”
“We want to collaborate with forward-thinking partners who, like us, are committed to creating a positive health care experience for members and patients. Penn State Health shares this vision and, together, we’re going to lead the change for a better model of health care in the heart of Pennsylvania.”
According to its website, Hershey Medical is the state’s only accredited Level 1 trauma center for both adult and pediatric patients, and it is the only Level 1 pediatric trauma center between Philadelphia and Pittsburgh.
The center has more than 1,100 physicians and advanced practice clinicians and it handles more than 70,000 emergency room visits yearly.
The medical college, started with a $50 million grant from the M.S. Hershey Foundation, has been educating future physicians since 1967. Penn State St. Joseph is a two-campus health system in Berks County with hospitals in Bern Township and Downtown Reading.
Highmark’s move is an apparent counter-punch to UPMC’s recent hospital acquisitions in that region, as both health care giants keep extending their reach across the state.
The battle is unfolding on both the provider and insurance fronts. Highmark and other Blue Cross Blue Shield plans have dominated the health insurance market in the region for years, although UPMC Health Plan has been gaining members through its acquisition of nine hospitals in the region this year, including PinnacleHealth System in Harrisburg.
While UPMC now operates 13 mid-state hospitals, Highmark’s partnership with Penn State Health plus a clinical joint venture with Geisinger Health System signed in May represents a significant step toward leveling the competitive field in the middle of the state, as UPMC and Highmark’s Allegheny Health Network continue to face off in Pittsburgh and Western Pennsylvania.
Highmark recently renewed its insurance contract with Penn State Health and its more than 22,000 employees.
But Penn State University announced in August that Aetna and CVS Caremark had won out over Highmark for the contract to administer medical benefits and prescription drug programs for its nearly 42,000 employees.
When that contract goes into effect next month, it will mark the end of the university’s more than 10-year relationship with Highmark.