Highmark to spend $20 million on upgrades at Forbes in Monroeville

Alex Nixon
| Thursday, Jan. 5, 2012

Highmark Inc. will spend $20 million during the next six to 12 months on upgrades at Forbes Regional Hospital as competition for medical services in Monroeville ramps up, the insurer said on Wednesday.

The work is part of Highmark's $475 million acquisition of struggling West Penn Allegheny Health System, which owns the 350-bed hospital. Highmark, the state's largest insurer, said it will expand its provider organization, of which West Penn Allegheny would be a part, by affiliating with Premier Medical Associates, the region's largest independent physician group.

Highmark believes the upgrades at Forbes and affiliation with Premier, which has 60 physicians in Monroeville, will strengthen its position in the Pittsburgh suburb where rival UPMC will open a $240 million hospital in July.

"It's really about providing our community choice," said Highmark CEO Dr. Kenneth Melani.

Highmark last spring moved to prop up West Penn Allegheny and this fall announced it was pursuing a larger medical provider strategy that includes acquiring or affiliating with hospitals and physician groups across the state. Those actions led UPMC, the dominant medical provider network in Western Pennsylvania, to stop negotiating in-network reimbursement contracts with Highmark.

Premier Medical Associates, which has 250 employees in 10 offices, will be owned by Highmark's provider organization, a separate company from Highmark's insurance business, Premier CEO Mark DeRubeis said. He declined to disclose the selling price.

"We are energized by this affiliation, which will allow us to expand our proven successes and offer affordable, efficient care to more people in the region," DeRubeis said.

Unlike the affiliation with Premier, Highmark's plan to acquire West Penn Allegheny requires approval from state regulators. The state Insurance Department has estimated it could take a year or longer to review the transaction, which Melani said is too long. Highmark officials plan to meet with department officials next week to explain West Penn Allegheny's "crisis situation," Melani said, and urge the state to finish its review in six months.

"We're not trying to cut corners," Melani said. "But does it have to take 12 months• ... I don't think they understand what's at stake."

The extensive work planned for the more than 30-year-old Forbes Regional includes renovating two floors of medical and surgical units, opening a breast care center, adding a third operating room for heart procedures, installing signs on top of the building and along Mosside Boulevard, and updating public spaces and waiting areas.

Other long-range and less specific plans for the hospital campus include expanding the emergency department, which is among the busiest in Allegheny County, said Dan Lebish, Highmark's executive vice president of integrated delivery systems. During the next couple of years, the hospital will pursue a Level II Trauma Center designation, which would enable it to treat severely injured people rather than transfer them to hospitals in Pittsburgh.

West Penn Allegheny will spend $2 million on equipment and physician recruitment as part of earning the designation by 2013 or 2014, said Reese Jackson, CEO of Forbes. The region's adult trauma centers are at Allegheny General Hospital, UPMC Mercy and UPMC Presbyterian, according to the Pennsylvania Trauma Systems Foundation.

Earning the designation at Forbes is an "important initiative," Chief Medical Officer Mark Rubino said, because it distinguishes the hospital from its competition and could draw injured patients from eastern Allegheny County and Westmoreland County.

It could be "good for collaboration with other institutions in this area," Melani said.

Forbes officials hope to construct a "boulevard-style" road from Mosside into the campus and build a parking garage, Lebish said.

Better access, signs and parking would make it easier for patients, he said. Interior upgrades will "make the patient feel like they're in a facility that's new and modern."

Forbes Regional Hospital, Monroeville

Beds: 350

Physicians: 500

Employees: 1,380

Initial upgrades

Time frame: 6-12 months

Cost: $20 million


-- Renovate two floors of medical/surgical units

-- Open breast care center

-- Add third cardiovascular surgery operating room

-- Erect new signs on building and along Mosside Boulevard

-- Update patient and visitor areas, including waiting rooms and cafeteria

Trauma center

Time frame: Designation as Level II Trauma Center by 2013 or 2014

Cost: $2 million

Other long-range plans

-- Two-story addition to emergency department

-- New elevators

-- All private-room medical pavilion

-- New parking garage

-- "Boulevard-style" vehicle entrance from Mosside

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