Independence Health System — with hospitals in Greensburg, Latrobe and Mt. Pleasant — announced Wednesday that it will join West Virginia University Health System beginning in fall 2026.

The agreement includes an $800 million commitment from the WVU system over the next five years to strengthen Independence Health System’s five hospitals and affiliated physician groups across Western Pennsylvania.

The investment is earmarked for modernization projects, including approximately $500 million toward physical upgrades on the Westmoreland Hospital campus, as well as upgrades to the Butler Memorial Hospital emergency room and an expansion of clinical services and access to high-quality care throughout the community.

The hospitals involved in the transition are Butler Memorial, Clarion, Frick, Latrobe, and Westmoreland hospitals.

First merger

The move follows the 2023 merger of the Westmoreland County-based Excela hospital system with the Butler Health System, which rebranded as Independence Health System in May 2023.

Ken DeFurio, president and CEO of Independence Health System, confirmed that each individual hospital will retain its local identity. He stressed that the decision was not made out of necessity.

“So by no means is this a decision that had to be made or was made out of any type of desperation,” DeFurio said. “Our board was very forward thinking in what is the next step. Part of that discussion is becoming part of a large organization with a deeper base and greater resources to move us in the right direction.”

The merger is subject to state and federal regulatory reviews and bondholder consent. Officials expect negotiations to finalize the merger by June 1, with the deal closed by the end of next September.

Financial picture

Hospital officials said talks with WVU Health System began earlier this year and were not initiated due to financial struggles.

However, Independence Health reported financial losses of about $74 million in 2023. Since the initial merger, Independence “has worked to cut losses almost in half … to $41 million in fiscal year 2024,” according to Tom Albanesi, Independence Health’s chief financial officer.

According to a presentation shared earlier this month, Independence Health’s revenues exceeded expenses at each of its hospitals for the 12 months that ended June 30. DeFurio expects the system to approach a break-even point in the upcoming year.

The health systems stated that the merger will result in expanded clinical services, enhanced financial stability via shared capital and improved outcomes for patients.

Albert L. Wright Jr., president and CEO of the WVU Health System, expressed enthusiasm for the partnership.

“I view this as a merger of two great entities that are going to come and become one integrated entity. … We’ve been having these discussion for a number of years and over the last six months really got into the details about things would look and work,” Wright said.

Broad territory

Independence Health System operates 925 beds and employs 7,000, serving over 750,000 residents across 10 Western Pennsylvania counties.

The WVU Health System operates 25 hospitals, including the 880-bed J.W. Ruby Memorial Hospital in Morgantown, with facilities across West Virginia, Maryland and Ohio. It operates 3,400 licensed beds, has about 35,000 employees, and approximately $7 billion in operating revenue.

WVU Health already has a presence in Pennsylvania, with facilities in Uniontown and Connellsville. In January, it announced its Golisano Children’s Hospital would partner with Independence Health to enhance neonatal intensive care unit services at Westmoreland Hospital.

Looking ahead

Michael Benson, president of West Virginia University and chair of the WVU Health System Board of Directors, praised the merger’s foundation.

“Today’s announcement marks the start of a new chapter built on shared values, deep respect and admiration for the work already being being done, and a mutual commitment to the patients and families who depend on these hospitals every day,” Benson said. “Together, we can build on that solid foundation and expand the reach of exceptional care throughout the region.”

Paul Bacharach, chair of the Independence Health System board of directors, affirmed that joining the WVU system will foster growth and stability for local hospitals and patients.

“The message we want our communities to hear from us today is we are here for you and we’re not going anywhere. We’re going to be better and you will all benefit from this,” said Mary Elizabeth Kovacik-Eicher, associate chief medical officer at Independence Health.

“This is a commitment from all of us to let you know as we set up here we are going to grow. This is an investment in all of you and in the health of our communities,” she added.

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