Highmark, West Penn Allegheny leaders meet to resurrect merger
Three days after a judge ruled that West Penn Allegheny Health System must remain in a merger deal with Highmark Inc., top leaders of the two organizations discussed plans to get the $475 million transaction back on track.
In a joint statement issued on Monday, West Penn Allegheny and Highmark said they have met with the health system's bondholders and more meetings are planned.
Highmark CEO William Winken-werder and Jack Isherwood, chairman of West Penn's board, were among the “small group of most senior leaders” to meet.
“A very productive session was held that focused on efforts the parties could take to address the financial condition of WPAHS to secure approval of their affiliation agreement by the Pennsylvania Insurance Department,” the statement said. “Both parties realize there are significant issues that must be addressed and that prompt action is essential.”
Allegheny County Common Pleas Court Judge Christine Ward on Friday granted Highmark, the state's largest health insurer, an injunction preventing West Penn from talking to other buyers and forcing the health system to remain in its deal with Highmark until May, when it will expire by previous agreement.
West Penn, the region's second-largest hospital system, said it had the right to shop itself after it accused Highmark on Sept. 28 of breaking their deal by requiring that the health system go through bankruptcy to reduce its $1 billion in bond debt and pension liability.
Highmark and West Penn said they are working to improve the health system's finances, including helping it recruit and retain employed physicians.
In testimony during a hearing on Highmark's injunction request, West Penn officials said Highmark wanted bondholders to reduce the $750 million they are owed by $300 million to $400 million. Highmark proposed that the federal Pension Benefit Guaranty Corp. take over West Penn's pensions, which are underfunded by about $280 million.
West Penn lost $112.5 million from operations in the year ended June 30, and its finances are worsening. Officials have predicted the system could be out of money in three to six months without additional help from Highmark.
Highmark wants to acquire the five-hospital system as the centerpiece of a new, $1 billion health system to compete against UPMC, the region's largest hospital system.
Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or email@example.com.
Add Alex Nixon to your Google+ circles.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Eat’n Park sells Cura division that serves hospitals and senior living
- ZeroFossil Energy Outfitters powers up with renewable sources
- Alcoa lands $1B airplane fastener contract from Airbus
- ATM fees soar as cash loses cachet
- Power plants challenged by carbon capture and storage
- PNC fined for paperwork errors on municipal bond offerings
- Energy efficiency goes mainstream with help of regulations, demand
- Volkswagen’s California pollution test site under scrutiny amid cheating scandal
- Calgon Carbon inks deals for mercury scrubbing at 9 power plants
- Koppers CEO believes struggling company can do better, transform
- Market rises on bet that Federal Reserve won’t raise interest rates soon