Highmark, West Penn Allegheny Boards Approve Definitive Agreement on Affiliation; Announce New Management and Detailed Next Step

Affiliation agreement to be filed with the Pennsylvania Insurance Department; Highmark, WPAHS expect thorough, timely regulatory reviews

PITTSBURGH, Nov. 1, 2011 /PRNewswire/ -- Officials from Highmark Inc. and the West Penn Allegheny Health System, Inc. (WPAHS) today announced another important milestone in their plans to build a new integrated health system that will deliver value, choices and high-quality health care services to the Western Pennsylvania community.

The two organizations announced that their boards of directors have approved a definitive agreement, which will soon be filed with the Pennsylvania Insurance Department (PID). In addition to the PID, the transaction must be reviewed by the Pennsylvania Attorney General and the Internal Revenue Service.  

"This transaction is critical to ensuring the continued vitality of the West Penn Allegheny Health System and maintaining provider choice in our community," said Kenneth R. Melani, M.D., Highmark's president and chief executive officer. "In recent weeks, we've been working very closely with the staff at West Penn Allegheny to finalize a definitive agreement. We've made significant progress to get to this point, but there is much to be done that cannot be accomplished until the affiliation is approved. For the benefit of the community, we hope the review and approval process is thorough and timely."

"Our anticipated partnership with Highmark has energized our medical staff and employees," said Jack Isherwood, chairman of the board of WPAHS. "Since the initial announcement on June 28, this transaction has continued to move steadily forward because both organizations share a commitment to making quality health care services available and affordable for the communities that we serve. We believe this partnership will create a highly efficient and lower-cost health care system, expand access to additional clinical services for patients and enhance medical education and training for physicians and other health care professionals."

As part of today's announcement, Mr. Isherwood introduced Keith T. Ghezzi, M.D. as the interim chief executive officer of WPAHS. Dr. Ghezzi is a Managing Director with Alvarez & Marsal Healthcare Industry Group in Washington, D.C. He specializes in operational and financial turnarounds, performance improvement and interim management. His primary areas of focus include health systems, large hospitals and physician group practices.

"I am proud to be joining the West Penn Allegheny Health System and a team of healthcare professionals that are highly-regarded for their commitment to excellent patient care. Their passion for delivering quality care has been palpable as I have spent time with physicians and staff throughout the system in recent months. I am also enthusiastic about working with our new partners, Highmark, to transform the healthcare delivery system in western Pennsylvania."

Dr. Ghezzi announced today that one of his first tasks will be to fulfill the commitment of Highmark and WPAHS to reinstate essential services and reopen the emergency department at West Penn Hospital, and to bolster other acute care services, along with making upgrades to other WPAHS hospitals.

As part of the affiliation agreement announced in June, Highmark provided WPAHS with an initial grant of $50 million to sustain and strengthen West Penn and Forbes Regional hospitals. Highmark has made a total financial commitment of up to $475 million – including $75 million to fund scholarships for students attending medical schools affiliated with WPAHS, and to support other health professional education programs.

About Highmark Inc.

Highmark Inc., based in Pittsburgh, is an independent licensee of the Blue Cross and Blue Shield Association, an association of independent Blue Cross and Blue Shield plans. Highmark serves 4.8 million members in Pennsylvania and West Virginia through the company's health care benefits business and is one of the largest Blue plans in the nation. Highmark has 19,500 employees across the country. For more than 70 years, Highmark's commitment to the community has consistently been among the company's highest priorities as it strives to positively impact the communities where we do business. For more information, visit www.highmark.com.

About West Penn Allegheny Health System, Inc.

West Penn Allegheny Health System is a physician-led healthcare organization based in Pittsburgh, Pa.  Recognized as a healthcare quality and personalized service leader in its market, the organization's sole purpose is to improve the health of people in the Western Pennsylvania region.  West Penn Allegheny Health System's specialty programs continually receive national and international recognition – particularly in the areas of Bone and Joint, Cardiovascular, Neurosciences and Oncology, which make up the organization's four Institutes of Excellence.  

The System is comprised of five hospitals, including Allegheny General Hospital on the North Side, West Penn Hospital in Bloomfield, Allegheny Valley Hospital in Natrona Heights, Canonsburg General Hospital in Canonsburg, Forbes Regional Hospital in Monroeville and a nearly 700-person multi-specialty physician group practice.  For more information, visit www.wpahs.org.          

SOURCE Highmark Inc.