Highmark Health's Allegheny Health Network announces $1B investment to build, renovate hospitals

Boardroom
Allegheny Hospital Network will invest $1 billion in capital improvements, it announced.

Highmark Health's Allegheny Health Network will invest $1 billion to build a new state-of-the-art hospital and new "neighborhood hospitals" and to renovate existing hospitals. 

The network, based in Western Pennsylvania, announced $315 million in capital improvements earlier this year, and on Wednesday revealed an additional $700 million in spending to increase care access and quality. The new construction and renovation will take place over the next four to five years and the system expects the expansion to create 800 new healthcare jobs. 

"We are listening to our patients and members and developing 21st century care models, programs and facilities that place their healthcare needs and preferences at the center of everything we do," David Holmberg, CEO of Highmark Health, said in the announcement. 

Free Daily Newsletter

Like this story? Subscribe to FierceHealthcare!

The healthcare sector remains in flux as policy, regulation, technology and trends shape the market. FierceHealthcare subscribers rely on our suite of newsletters as their must-read source for the latest news, analysis and data impacting their world. Sign up today to get healthcare news and updates delivered to your inbox and read on the go.

RELATED: Geisinger Health System and Highmark announce plans to create a new community-based clinical network 

The biggest project announced by AHN is the construction of a new, 160-bed hospital in Wexford, a suburb of Pittsburgh. The system opened the Wexford Health and Wellness Pavilion in 2014, and the new hospital will complement the outpatient services offered by that facility, the network announced.

The new hospital will provide clinical services that many patients in the area travel into Pittsburgh for, according to the announcement. Once AHN secures needed regulatory approvals, it expects to break ground on the new facility in mid-2018 and complete the project by 2021. 

RELATED: The digitalized hospital of the future will include clinical command centers and interoperable EHRs 

In addition to the new hospital, AHN will partner with Emerus, the country's leading developer of 'micro-hospitals', to build four "neighborhood hospitals" in the region over the next 18 to 24 months. Emerus facilities typically have between 10 and 12 inpatient beds for observation and short-term stays, and also offer on-site emergency care, primary care and specialty care. 

AHN wil be the first system in the eastern part of the country to partner with Emerus, according to the announcement. AHN and Emerus will share the cost of building the facilities, and Emerus will manage them. Cynthia Hundorfean, CEO of AHN, said in the announcement that the partnership was attractive as "the future of healthcare is local." 

"Our first and foremost priority is providing patients with the absolute best care experience possible," Hundorfean said, "and it is immensely gratifying to be able to partner with an organization that shares those values." 

RELATED: 'Micro-hospital' model could help underserved populations 

AHN is also planning to invest in renovating some of its current hospitals. It will expand and update the emergency department at Jefferson Hospital, a 341-bed facility in the Pittsburgh suburb Jefferson Hills, and will expand the perioperative and post-operative facilities at the 297-bed Forbes Hospital. 

The project also includes updates at Allegheny General Hospital and West Penn Hospital.