Highmark, West Penn Allegheny Boards Approve Affiliation Agreement

Officials from Highmark Inc. and the Inc. (WPAHS) Tuesday announced another important milestone in their plans to create a new integrated health system.

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). The agreement also 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, 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 , 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 the , Highmark provided WPAHS with an initial grant of $50 million to strengthen West Penn and Forbes Regional hospitals.

Highmark also has made a 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.

As part of Tuesday’s announcement, Isherwood introduced Dr. Keith T. Ghezzi as the interim chief executive officer of WPAHS. Ghezzi is a managing director with Alvarez & Marsal Healthcare Industry Group in Washington, DC. 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 health care professionals that are highly regarded for their commitment to excellent patient care," Ghezzi said. "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 health care delivery system in western Pennsylvania.”

Ghezzi said Tuesday that one of his first tasks would 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.