Health
6:54 pm
Tue June 12, 2012

Highmark, Jefferson Medical Center Hope to Enter "Strategic Partnership"

It isn't a rescue, a takeover, or a merger, according to Highmark interim CEO and Board Chairman J. Robert Baum.

However, the Pittsburgh-based health insurer wants to provide at least $275 million to the Jefferson Regional Medical Center and its foundation in return for effective control of Jefferson's Board of Directors.

Highmark and Jefferson announced the "strategic partnership" plan on Tuesday at Jefferson Hospital, the South Hills health system's flagship facility. The pending deal must be approved by the state Attorney General and the Allegheny County Orphans Court before taking effect.

"Highmark will have the right to 75% of the votes on the health system's board of directors, and Jefferson's board members, existing as they are now, will have 25% of the vote on the board of directors," said Baum.

Baum said Highmark would pay for upgrades for Jefferson Hospital's emergency room and other facilities, at a cost unknown so far. The insurance company would also give a big grant to the Jefferson Regional Medical Center Foundation.

"The 75 million [dollar grant] is being derived from money that we have set aside for the development of our provider organization. Some of you know that has come out as part of one billion dollars that we've set aside for the entire provider development program," said Baum. "Highmark would be guaranteeing some of the liabilities and obligations of the Jefferson Medical School System too, and that would amount to about 200 million dollars."