With AHN's expansion, hospital competition heats up in Westmoreland County
The news conference played out like a welcome reception for Allegheny Health Network and Highmark Health as officials announced plans Monday to build a for-profit community hospital in Hempfield.
Westmoreland County officials joined Hempfield Supervisor Doug Weimer in celebrating the new community hospital that will be 120,000 square feet, open 24 hours a day with a full-fledged emergency department, and contain 10 inpatient beds.
“Welcome to the neighborhood,” said county Commissioner Ted Kopas. “We look forward to working with you.”
Westmoreland County mainstay Excela Health didn't exactly feel the warmth after learning about the new AHN Hempfield-Neighborhood Hospital.
“I think it's predatory,” Excela President and CEO Bob Rogalski told the Tribune-Review. “There's no need for this development. None whatsoever.”
Rogalski said AHN once described UPMC in similar fashion when the health giant revealed efforts to open a hospital in the South Hills near AHN's Jefferson Hospital in Jefferson Hills. Excela Westmoreland Hospital in Greensburg is about two miles away from the new AHN hospital site.
“They used the word ‘predatory' at that time,” he said. “I feel the same way now as they did in this particular case.”
Asked about the push into Westmoreland County, AHN President and CEO Cynthia Hundorfean said there's enough demand for health care to go around. AHN Hempfield will be at the intersection of Agnew Road and Route 30. There's a “coming soon” billboard in place.
“I think there's more than enough business to accommodate everybody,” she said.
Insurance provider Highmark Inc. has a contract with Excela through 2020. AHN and Highmark Inc. are owned and operated by Highmark Health.
Rogalski said about 80 percent of Excela's 5,000 employees carry Highmark insurance.
“I think we have to re-evaluate our relationship with Highmark,” he said. “I think what they're saying now is spin.”
Rogalski wondered whether the AHN effort will wind up taking patients who can't be treated at a community hospital out of Westmoreland County and into AHN facilities like Allegheny General Hospital in Pittsburgh.
Hundorfean said the opposite is intended.
“This model can't be focused on downtown Pittsburgh,” she said. “We will deliver exceptional patient care in cost-efficient settings and deliver great care to our patients in the neighborhoods where they live, not the other way around.”
There will be times, she said, when AHN will have to transfer patients to other facilities.
“We would love to include them,” Hundorfean said of Excela. “That will be up to them.”
Westmoreland County has about 125,000 members carrying Highmark insurance, according to Thomas Fitzpatrick, Highmark Inc.'s senior vice president of provider contracting and relations. He said $100 million for Westmoreland County Highmark members is spent on health care outside of the county.
“One of the goals of this venture is to make sure that we continue to deliver care to Westmoreland County residents in Westmoreland County,” Fitzpatrick said.
Allegheny Health Network's four so-called micro-hospitals will be built through a new partnership with Texas-based Emerus, a for-profit developer and management firm. AHN and Emerus will split construction costs, with Emerus managing the hospitals.
On its website, Emerus describes itself as “the nation's first and largest operator of micro-hospitals.”
Its facilities typically range from 15,000 to 60,000 square feet and include an emergency department as well as 10 to 12 beds for observation and short stays.
In October, Highmark Health and Allegheny Health Network announced a massive $700 million expansion plan that includes construction of the four neighborhood hospitals, a 160-bed, state-of-the-art hospital in Pine and renovation of its existing facilities throughout Western Pennsylvania.
Officials have said the seven-hospital AHN is in the midst of a financial upswing. It reported an operating gain of $13 million for the half-year following a 2016 operating loss of $39 million.
The new AHN facilities are expected to add 800 jobs to Western Pennsylvania's health care workforce, officials said at the time of the October announcement.
On Monday, David Stillwell, chief operating officer of Emerus, said the company will bring about 50 employees to the AHN Hempfield operation. AHN and Highmark expect to hire 50 to 100 additional employees.
“The success of this, we believe, is very important to this community here,” Stillwell said. “What we are building here will impact every family in the region. I'm confident that our four neighborhood hospitals that we'll be building throughout Western Pennsylvania will address some of the most pressing needs that we have in health care today, that's providing better access to round-the-clock emergency medicine, primary and speciality care — bringing the convenience of those solutions to your neighborhoods.”