Medical option: The West Penn Allegheny system must survive
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For anyone in Western Pennsylvania concerned about health care and health insurance -- and that's just about everybody -- Friday's news almost could not have been bigger.
The struggling West Penn Allegheny Health System, the closest thing to a competing hospital network against UPMC, announced it had canceled its $475 million deal to be acquired -- and saved -- by insurer Highmark Inc. West Penn Allegheny said it was scrapping the deal because Highmark wanted the system to restructure through bankruptcy, which WPAHS rejected as only a "last option."
A Highmark statement said it "continues to believe that an affiliation ... is in the best interests of both parties, and more importantly of the entire community." It also denied the claim by WPAHS that the insurance company had breached the two parties' affiliation agreement.
Wherever the truth lies and whatever follows, millions of medical consumers can't help but be disturbed about where this will leave them and their options for quality care and affordable insurance. Monopoly is not the community's friend.
For more than a year, the people of southwestern Pennsylvania have had to cope with the reality that UPMC, the region's largest health care network, has refused to renew its service agreement with Highmark, the region's largest health insurer. A big reason is UPMC is now in the insurance business, too. That means Highmark customers will lose preferred-rate, in-network access to UPMC doctors and facilities at the end of 2014.
Highmark's foray into health care, with its WPAHS purchase agreement, was meant to stabilize the hospitals' finances so they could go head to head with UPMC. Now the deal is over. WPAHS says it will look for a new partner and that it is here to stay. We can only hope.
With West Penn Allegheny wracked by severe funding issues, it was hard to imagine a more logical white knight than Highmark, with $4.1 billion in reserves. But whether its future is with a new partner or its old suitor, WPAHS must survive.
Friday's announcement shook the medical landscape, but if this patient doesn't make it the region will be faced with even bigger health care tremors.
First Published September 29, 2012 12:00 am