Acquisition, not merger: WVU Health System will offer insurance plan, pick up Independence debt

WVU Health System will acquire the facilities, employees — and debt load — from Independence Health when the two entities are officially joined in the second half of next year, according to hospital officials.

It also will gain access to what Independence Health has touted as more than 750,000 people living in the 10-county area that the local hospital system serves from its facilities in Westmoreland and Butler counties.

And the deal specifically is an acquisition, not a merger, according to Angela Jones, a spokeswoman for WVU Health System. Review of the proposed acquisition must still be completed by the state Department of Health and the Federal Trade Commission.

WVU Health System said it does not plan to reduce services at Independence hospitals. When a larger health system acquires a smaller one, the bigger health system is typically the dominant one and leaves the question to what extent the local hospital has control, said Harold Miller, president of the Center for Healthcare Quality and Payment Reform. The Pittsburgh-based policy center facilitates improvements in health care payment and delivery systems.

Yet to be revealed is how the board of directors will be structured when WVU Health System takes control of Independence Health System, Miller said.

“The board composition is very important,” Miller said, adding the control of the hiring system may determine where physicians — particularly those with specialties — will be located, Miller said.

Choice of words

The distinction between an acquisition and a merger usually is found in the language of the agreements, said Jamie Godwin, a senior analyst focusing on the business practices of hospitals and other providers at KFF, a San Francisco-based independent source for health policy research and polling.

“It really depends on the nature of the specific deal,” Godwin said.

The debt incurred by Independence Health, which was created in 2023 from the Excela and Butler health systems, was down to about $41 million in fiscal year 2024 from a starting debt of approximately $74 million.

WVU Health System said it has plans to invest $800 million over five years into facilities in Butler and Greensburg.

It also will introduce its health plan, Peak Health, at the Pennsylvania hospitals and the potential for new subscribers to its health plan is “a huge factor,” according to Godwin. With its own health insurance plan, WVU Health System is part of the provider-sponsored health plan systems where costs can be controlled by the health care providers that operate their own insurance plan.

UPMC also is a provider-sponsored system with its UPMC Health Plan, while Allegheny Health Network is closely associated but still separate from Highmark Blue Cross and Blue Shield. WVU Health system also accepts Highmark among a range of independent insurance.

Approval process

WVU Health System is looking to finalize the acquisition at the beginning of October 2026, according to Albert Wright Jr., CEO of WVU Health System.

The change of ownership process is identical for all health systems, requiring information and records to be reviewed, regardless of whether they are in Pennsylvania or from another state, said Mark O’Neill, a spokesman for the state Department of Health.

After the agency’s review is complete, the department will determine whether to issue a license to WVU Health System to operate Independence Health’s five hospitals, O’Neil said. There are no public hearings related to the application process nor is there a standard time frame for how long it takes for the ownership process to be completed, O’Neill said.

”Every application is unique and has a variety of factors that can determine how long it takes to approve or deny a hospital acquisition from the time the Department receives an initial application,” O’Neill said.

The proposed deal also will undergo a review by the Federal Trade Commission, said Angela Jones, a spokeswoman for WVU Health System.

As a general matter, the Federal Trade Commission does not comment on specific pending mergers or acquisitions, said Victoria Graham, a spokeswoman for the FTC.

Not all mergers or acquisitions require a pre-merger filing, according to the FTC. Generally, the deal must first have a minimum value and the parties must be a minimum size. Those filing thresholds are updated annually, the FTC said.

Certain mergers and acquisitions do require reports to be filed with the FTC and the Justice Department’s antitrust division, as well a specified waiting time before the deal is finalized, according to the FTC.

When there is an acquisition by a health system in a different state where there is geographic separation, “it is a less likely to be challenged” on the grounds of antitrust, KFF’s Godwin said.

WVU Health System operates Uniontown Hospital and has an outpatient clinic in Connellsville. There is the potential concern over antitrust issues if the entities operated in the same market for patients, Godwin said.