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Highmark and Penn State Health invest $1B in central Pennsylvania health network

Ben Schmitt
| Friday, Dec. 15, 2017, 5:09 p.m.
Penn State Health Milton S. Hershey Medical Center
Highmark
Penn State Health Milton S. Hershey Medical Center

Insurer Highmark Health and Penn State Health on Friday announced they will invest $1 billion in a partnership to create a “community-based health care network” that will serve central and south central Pennsylvania.

“This is a game changer,” said David Holmberg, president and CEO, Highmark Health. “We want to collaborate with forward-thinking partners who, like us, are committed to creating a positive health care experience for members and patients. Penn State Health shares this vision and, together, we're going to lead the change for a better model of health care in the heart of Pennsylvania.”

Detailed financial terms were not released. A news conference with officials from both organizations is scheduled for 10:30 a.m. Monday in Hershey.

Highmark Health will join Penn State as a member of Penn State Health, with a minority interest, that will provide up to three seats on the 15-member board of directors, according to a news release.

The network will be anchored by the Milton S. Hershey Medical Center in Hershey, which is an accredited Level 1 trauma center for both adult and pediatric patients, according to its website. It has more than 1,100 doctors and providers and 548 beds.

The partnership's goals include:

• Developing new facilities in central and southcentral Pennsylvania.

• Reinforcing the role of the Milton S. Hershey Medical Center and Penn State Children's Hospital a destinations for advanced care in the region for adults and children.

• Exploration and development of innovative, patient-focused co-branded health care insurance products.

“This exciting partnership is a commitment by our organizations to ensure that health care delivery in our region remains patient-focused, enhances overall health and wellness and creates increased opportunity for collaboration with community physicians,” said Dr. A. Craig Hillemeier, dean, Penn State College of Medicine; chief executive officer, Penn State Health; and senior vice president for Health Affairs, Penn State.

The partnership does not affect patients' care or insurance coverage, officials said.

“Under the terms, Penn State Health remains free to contract with other health care insurance companies, now and in the future,” the news release said. “Penn State Health's existing health insurance agreements will remain in place. Likewise, Highmark Health's payer arm, Highmark Inc., will be free to contract with other hospitals and health systems, and its existing agreements with other health care providers in the region will remain unchanged.”

Highmark Health is the parent company of Allegheny Health Network.

Last month, Highmark rival UPMC announced plans to invest $2 billion as part of an expansion that includes building three specialty hospitals in Pittsburgh focused on cancer, organ transplants, and heart and vision care.

UPMC President and CEO Jeffrey Romoff said the hospitals will be built on the campuses of UPMC Presbyterian in Oakland, UPMC Mercy in Uptown and UPMC Shadyside.

“UPMC desires to be the Amazon of health care,” Romoff said at the time.

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

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