About Alex Nixon

Alex Nixon 412-320-7928
Business Writer
Pittsburgh Tribune-Review

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UPMC may be expanding farther east.

Western Pennsylvania's largest hospital system will enter negotiations to acquire Altoona Regional Health System, a 380-bed nonprofit hospital owner.

Altoona Regional Health System announced the plans in a statement on Wednesday, stating that it wants a partner that can provide money, expertise and technology to expand medical services.

“We are interested in a relationship that will enable Altoona Regional to further enhance its quality of care and breadth of medical services, while gaining new access to capital and outstanding technology, science, innovation and expertise,” CEO Jerry Murray said in a statement.

“While no final decisions have been made, this is the next logical step in the affiliation process,” Murray said.

UPMC won the right to enter the talks over health insurer Highmark Inc. and Geisinger Health System. All three had offered to acquire or partner with Altoona Regional in presentations to the health system's board over the past year.

Altoona Regional provided no timeline for when the negotiations on an acquisition agreement may be completed. No further details of a possible deal were available.

“UPMC has had a long and mutually beneficial relationship with Altoona Regional Hospital and looks forward to further discussions,” spokesman Paul Wood said.

UPMC's health insurance subsidiary, UPMC Health Plan, provides coverage for Altoona Regional's nearly 4,000 employees.

UPMC owns 19 hospitals in Western Pennsylvania, including UPMC Hamot in Erie, UPMC Northwest in Seneca and UPMC Bedford, outside of Pittsburgh, and employs more than 3,300 physicians. It had $10 billion in revenue for the year ended June 30 and is the largest private employer in Pennsylvania, with 56,000 workers.

Highmark, the state's largest health insurance company, is creating a $1 billion health system to compete with UPMC. It has announced acquisition deals with West Penn Allegheny Health System, St. Vincent Health System in Erie and Jefferson Regional Medical Center in Jefferson Hills.

Geisinger is an eight-hospital health system and health insurer based in Danville.

Altoona Regional has also been in discussions to partner with the 44-bed Nason Hospital in Altoona.

The health system had income from operations of $6.4 million for the 12 months ended June 30. In the prior year, the system lost $14.7 million from operations, according to financial statements.

It had long-term debt of $81.8 million and pension liability of $40 million as of Dec. 31.

Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or anixon@tribweb.com.

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