Pennsylvania community health system pursuing affiliation with UPMC

UPMC has signed a nonbinding letter of intent to affiliate Washington Health System, a two-hospital nonprofit community health system based in Pennsylvania, according to a release shared Tuesday.

Washington had been on the lookout for a larger health system to join since late 2022 when its board submitted a request for proposals.

Highmark Health’s Allegheny Health Network, a competitor to UPMC, was reportedly in the running but will now be looking at other ways to expand its presence in Washington’s markets.

UPMC and Washington will be hashing out the terms on a definitive affiliation agreement “over the next several months,” a deal that would be subject to customary regulatory filings. Other potential terms were not disclosed.

“Our primary focus is to ensure the residents of Washington and Greene Counties have local access to high-quality health care that is sustainable into the future,” Brook Ward, president and CEO of Washington Health System, said in the announcement. “After careful consideration and analysis, we believe the best path forward is to affiliate with UPMC to achieve that goal.”

Washington is headlined by its 278-bed flagship hospital in Washington, Pennsylvania, but also runs a 49-bed facility in Waynesburg, Pennsylvania, and over 40 other offsite locations across three of the state’s counties.

UPMC is among the nation’s largest nonprofit integrated health systems, with 40 hospitals and 800 offices and outpatient sites strewn across Pennsylvania, New York, Maryland and abroad. It reported $25.5 billion in total operating revenue in 2022 and runs an insurance division covering 4.5 million people.

The two organizations have decades of history together. Washington’s flagship hospital was one of the original members of UPMC Health Plan when it launched 26 years back, among other collaborations spanning cancer treatments, vascular surgery services and neonatal care.

“We currently have numerous clinical arrangements and joint ventures with UPMC, which have provided our patients with exceptional care over the years,” Ward said. “From our experience working with UPMC and knowing their track record of providing outstanding patient care, it was an obvious choice to select UPMC as our partner going forward.”

UPMC has grown rapidly in recent decades, logging 28 acquisitions between 1996 and 2019. Last month, major labor unions accused the system of wielding its scale against workers and called on the Department of Justice to investigate a potential Sherman Antitrust Act violation.