PinnacleHealth to merge with UPMC, acquire 4 hospitals to expand presence in central Pennsylvania

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PinnacleHealth has announced two separate deals aimed at bolstering its presence in central Pennsylvania.

PinnacleHealth announced two separate deals aimed at bolstering its presence in central Pennsylvania.

The organization’s announcement unveils a planned affiliation between PinnacleHealth and the University of Pittsburgh Medical Center (UPMC), the state’s largest integrated health system.

“UPMC affiliations have meant significant investment and growth in advanced specialty care, primary care and community services for local residents,” said Jeffery A. Romoff, president and CEO of UPMC. The organizations said in the announcement that they believe the affiliation will increase healthcare choices for patients and aid in doctor recruitment.

In a separate transaction, PinnacleHealth has also agreed to acquire four Central Pennsylvania hospitals from Community Health Systems: Memorial Hospital of York, Lancaster Regional Medical Center, Heart of Lancaster Regional Medical Center and Carlisle Regional Medical Center. The four form part of a planned 25-hospital divestiture, according to Community Health Systems.

The move continues an industry trend toward consolidation as healthcare systems seek to position themselves for more efficient provision of care in an environment increasingly focused on value-based care and population health. Phil Guarneschelli, president and CEO of PinnacleHealth, emphasized the benefits of his organization’s integration and alignment with UPMC. “Together we can innovate more and advance healthcare, while delivering even better health outcomes at a lower cost,” he said.

Both transactions will be subject to regulatory approvals, with the potential for PinnacleHealth’s increased market share to pose an issue, according to an article from PennLive. Based upon remarks from industry insiders, the publication suggests objections from the state’s largest insurer, Highmark, as well as Penn State Hershey Medical Center.

Those organizations both have a history with either PinnacleHealth or UPMC. Penn State Hershey attempted a merger with PinnacleHealth last year, but the proposed deal eventually fell through amid worries about increased costs for patients. For its part, UPMC’s longstanding battle with Highmark led to UPMC’s refusal to accept Highmark’s insurance coverage in the western part of the state. That forced patients to choose between their provider and their insurer, PennLive reported.