PinnacleHealth wraps merger with UPMC, becomes UPMC Pinnacle

Hanover Hospital affiliation also completed

PinnacleHealth has a new name, and two new affiliations.

The Harrisburg-based health system on Friday announced that it has officially joined the University of Pittsburgh Medical Center system, becoming UPMC Pinnacle as the culmination of an affiliation process that was first announced in March.

Separately, it was announced that UPMC Pinnacle also has completed its affiliation with Hanover Healthcare PLUS, the parent company of Hanover Hospital in York County, after securing regulatory approvals.

Under the UPMC merger, Pinnacle will retain local governance, hospital officials said Friday morning, and insurance coverage will not be affected.

UPMC Pinnacle’s acquisition of Cumberland County-based AllBetterCare urgent care centers also was completed on Friday, officials said.

Terms of the deals were not disclosed.

Pinnacle UPMC emerges

Local governance of UPMC Pinnacle will continue under a board of directors, officials said, consisting of 12 Pinnacle-designated volunteer business and community members along with six newly appointed members from UPMC.

The UPMC Pinnacle Board will be responsible for Central Pennsylvania operations including quality of care, access to care, insurance contracts, staff development and growth initiatives.

UPMC Pinnacle serves a 10-county area, with more than 2,900 physicians, about 11,000 employees, and eight acute-care hospitals with 1,360 licensed beds. The system is expected to care for 1.2 million people in fiscal 2018.

“We are pleased that the affiliation is complete, and we look forward to starting a new chapter of collaboration with UPMC,” said Philip W. Guarneschelli, president and CEO of UPMC Pinnacle.

The system will continue to honor contracts in place with regional insurers, and has reaffirmed its commitment to continuing to work with multiple payers in the future.

UPMC Pinnacle also will participate with all UPMC insurance products available in the market, officials added. Highmark members in Central Pennsylvania will continue to have access to UPMC Pinnacle care under a long-term contract extension signed by Highmark Blue Shield and PinnacleHealth in August.

UPMC Pinnacle spokeswoman Kelly McCall said a formal celebration of the affiliation and a press conference are set for Sept. 11, and that answers to questions about the transition would be addressed at that time.

While not referred to as an acquisition, the deal clearly is not a merger of equals.

Based in Pittsburgh, UPMC is the largest nongovernmental employer in Pennsylvania, with 80,000 employees, more than 30 hospitals, 600 doctors’ offices and outpatient sites, and a 3.2 million-member insurance services division, the largest medical insurer in western Pennsylvania.

UPMC’s operating revenues for the first nine months of fiscal 2017, reported in May, were $11 billion, with net income of $871 million.

Nonprofit PinnacleHealth recorded about $1.5 billion in patient revenue for the fiscal year ended June 30, 2016, according to its most recent annual report.

“We are excited to welcome Pinnacle to UPMC,” Jeffrey A. Romoff, president and CEO of UPMC, said in a statement.

“We have a long track record of successful affiliations, all of which have resulted in significant investment and growth in advanced specialty care, primary care and community services accessible locally to residents of many diverse communities,” Romoff added.

Indications about UPMC’s willingness to invest in the former PinnacleHealth properties emerged before the affiliation was complete.

UPMC successfully applied to the Pennsylvania Economic Development Financing Authority to borrow $750 million in new funding, roughly $400 million of which will fund new construction and renovations at properties across the state.

Among those sites were more than a dozen associated with PinnacleHealth operations, as well as at Hanover Hospital.

The borrowing also included $235 million to cover Pinnacle’s purchase of four midstate hospitals earlier this summer.

Dr. Christian Caicedo, UPMC Pinnacle chief medical officer, said the transition will bring new services to the region and help the organization recruit leading doctors.

“Both organizations are already leaders in the provision of clinical trials in our respective regions, and collectively we can increase patient access to pioneering clinical trials and experimental therapies,” Caicedo said.

Hanover affiliation

Submitted

With the Hanover affiliation, UPMC Pinnacle has committed to retain the current leadership team and employees in good standing for at least 12 months, to ensure that all charitable donations given to Hanover Hospital will remain in the community, and to have the local board of directors play a role in governing the organization.

Hanover Hospital has 93 licensed beds, more than 1,400 employees and over 240 medical staff physicians.

“We are honored to welcome Hanover HealthCare PLUS and its employees to UPMC Pinnacle,” Guarneschelli said. “Its medical staff and employees are dedicated to their patients, and we are delighted to join them in their effort to make the communities they serve healthier.”

UPMC Pinnacle is working with health plans and insurers to continue contracts currently in place at the hospital to support continued network participation for patients and payers, officials said.

The hospital will maintain its current name on all signage and communications for an unspecified period of time after the transition.

A flag-raising ceremony will mark the transition on Sept. 6.

Roger DuPuis
Roger DuPuis covers Cumberland County, health care, transportation, distribution, energy and environment. Have a tip or question for him? Email him at rdupuis@cpbj.com.

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