Highmark Files New Papers With Insurance Department
Highmark Inc. President and CEO William Winkenwerder addressed the next steps the insurance provider is taking in its efforts to acquire the fledgling West Penn Allegheny Health System.
“In addition to preserving choice and access to affordable health care for this community, this affiliation will help slow the rise of health care costs, improve the quality of care in the region and create a better experience for a lot of patients,” he said.
With this acquisition, it is believed that West Penn Allegheny/Highmark will become formidable competition to regional health-care giant UPMC. Highmark is also building partnerships with other hospital systems including Jefferson Regional Medical Center and is building at least one medical mall.
Winkenwerder said it has not been an easy process and that “an important milestone for the community has been achieved here this week.”
On Wednesday, The Pennsylvania Insurance Department announced that Highmark filed its second amended filing regarding its proposed affiliation with West Penn Allegheny. The proposal had additional changes as well as a proposal from Highmark to buy West Penn Allegheny's bonds.
“Both Highmark and West Penn have extraordinary track records in serving health consumers in Western Pennsylvania,” said Insurance Commissioner Michael Consedine in a statement. “As insurance regulator, the department is charged with analyzing legal standards that look specifically at the overall effect any transaction would have on the insurance entity’s financial stability, as well as any negative impact it may have on their policyholders and the public,” he said.
The latest filings describe recent developments including Highmark’s offer to buy WPAHS’s series 2007A bonds for cash at 87.5 percent of par amount, that could lead to payments by Highmark of $600 million or more. Principal and interest payments from WPAHS would be be deferred until July 1, 2015 on Highmark held-bonds; $50 million aggregate increase in rates would be paid by Highmark to WPAHS over five years and $75 million of funding previously earmarked for medical education would be redirected as a grant to WPAHS.
Winkenwerder said they will cut down on costs at WPAHS Hospitals and improve patient experiences.
“Doctors will be asked to be more productive, access for patient appointments and admissions will be improved, referral relationships and communications with community hospitals will be improved and new programs and services will be initiated,’ he said.