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Highmark and Allegheny Health Network to announce 'major investment in new facilities'

Ben Schmitt
| Wednesday, Oct. 18, 2017, 7:54 a.m.
The Highmark sign sits atop Fifth Avenue Place in downtown Pittsburgh.
Tribune-Review
The Highmark sign sits atop Fifth Avenue Place in downtown Pittsburgh.
Officials marked the opening of a new 23,000-square-foot Allegheny Health Network Outpatient Center in Hempfield on Tuesday July 18, 2017.
Christian Tyler Randolph | Tribune-Review
Officials marked the opening of a new 23,000-square-foot Allegheny Health Network Outpatient Center in Hempfield on Tuesday July 18, 2017.

Highmark Health and Allegheny Health Network officials scheduled a news conference for Wednesday morning to announce what is described as “a major investment in new facilities that will significantly expand access to high-quality, high-value health care services across the Western Pennsylvania region.”

The press conference is scheduled for 10:30 a.m. Downtown and will include remarks from Highmark Health President and CEO David Holmberg, Allegheny Health Network President and CEO Cynthia Hundorfean and Deborah Rice-Johnson, president of Highmark Health Plan.

In July, the Pennsylvania Insurance Department gave Highmark Health greater flexibility to invest in Allegheny Health Network, loosening requirements the department imposed when it allowed Highmark to form the hospital system in 2013.

Under the terms of the 2013 order, Highmark had to receive the department's approval for any transfer of more than $250 million to the hospital system. The insurer had to notify the department of any transfers over $100 million.

The department modified the order this summer to permit Highmark to invest in AHN without approvals or notifications as long as the insurer's spending on the system doesn't exceed 10 percent of Highmark's surplus.

Highmark's surplus is about $3.9 billion, spokesman Aaron Billger told the Tribune-Review in July.

Highmark requested the change in March, at the same time it filed a request to give AHN $850 million over the next two years. The insurer has invested about $1 billion in the system. In its request, Highmark said the restrictions unfairly inhibited competition.

The modification comes as Highmark and AHN prepare for 2019, when most of the remaining business relations between Highmark and rival UPMC are set to end under a state-brokered consent decree.

Meanwhile, UPMC said in August that it is eyeing Natrona Heights and other areas near Alle-Kiski Valley to build a large-scale medical mall. The announcement came during the unveiling of a 44,000-square-foot, $19 million outpatient medical center along Route 8 in Hampton.

In addition to Natrona Heights, other areas under consideration by UPMC include the Aspinwall/Blawnox area and Cranberry region, officials said at the time.

AHN's 175,000 square foot Wexford Health + Wellness Pavilion in Pine, about 10 miles from the Hampton center, is also described a “medical mall.” It opened in 2014.

Ben Schmitt is a Tribune-Review staff writer. Reach him at 412-320-7991, bschmitt@tribweb.com or via Twitter at @Bencschmitt.

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