Highmark said Tuesday it's affiliating with Erie, Pa.-based Saint Vincent Health System in a deal worth $65 million. The companies signed a letter of intent to pursue the deal, which is expected to close by the end of the year, reported the Associated Press.
The agreement with St. Vincent's Health System, which owns a 428-bed hospital in Erie and a smaller hospital in Westfield, N.Y., plus a doctors group and a surgery center, shows that Highmark's recent tangles with West Penn Allegheny Health System aren't thwarting the insurer's plans to build a dominant health delivery network to compete against UPMC, the Pittsburgh Tribune-Review reported.
"St. Vincent's has always been on Highmark's radar screen," Jan Jennings, a consultant and president of American Healthcare Solutions, told the Tribune-Review. "Highmark has always wanted to have a presence in that market."
Under the terms of the deal, Highmark will appoint 75 percent of St. Vincent's board and will provide $5 million for capital projects, tens of millions of dollars to upgrade St. Vincent's IT systems and $20 million to stabilize the hospital's balance sheet, the Pittsburgh Post-Gazette reported.