UPMC, PinnacleHealth Sign Letter of Intent to Pursue Affiliation

PinnacleHealth System in Harrisburg, Pa. and UPMC (University of Pittsburgh Medical Center) have signed a letter of intent to pursue an affiliation, making it one of the biggest deals ever of its kind in the region.

The move is one that would position PinnacleHealth to expand healthcare services, advance quality initiatives and continue to provide nationally recognized care in central Pennsylvania, according to a March 14 announcement from UPMC.

Separately, it was also announced yesterday that Memorial Hospital of York in York, Lancaster Regional Medical Center in Lancaster, Heart of Lancaster Regional Medical Center in Lititz and Carlisle Regional Medical Center in Carlisle will be acquired by PinnacleHealth in a different transaction, pending approval.

As a PennLive article reported on both deals, “The move would dramatically expand the footprint of PinnacleHealth, giving it seven hospitals in four counties. It happens as hospitals all over the country merge or get absorbed, with hospital leaders saying added size and scale are essential to survival. It also would unite PinnacleHealth with Pennsylvania's largest health system—UPMC has more than 20 hospitals—and one that is considered among the best in the United States.”

Indeed, UPMC is one of the nation’s largest and most successful integrated health systems. As both a provider and insurer, UPMC integrates more than 25 hospitals, 600 doctors’ offices and outpatient sites, and a more than three million-member insurance services division, the largest medical and behavioral health insurer in western Pennsylvania. “UPMC has a long history of successful affiliations, most recently UPMC Susquehanna, UPMC Altoona and UPMC Hamot in Erie, where UPMC affiliations have meant significant investment and growth in advanced specialty care, primary care and community services for local residents. This is at the heart of what we do,” Jeffrey A. Romoff, president and CEO of UPMC, said in a statement. “We are pleased about PinnacleHealth’s shared vision to expand evidence-based, world-class healthcare with value-driven, low-cost insurance products to benefit more residents and businesses throughout Pennsylvania,” Romoff said.

According to the announcement, both organizations have begun the due diligence process to work toward a definitive agreement to affiliate. As the organizations move forward into the process, which is subject to customary regulatory approvals and closing conditions, PinnacleHealth will continue to keep its stakeholders—employees, partnering physicians, local employers, payers and the community— updated as there are developments to share.

“Having PinnacleHealth affiliate with UPMC is an exciting opportunity for the system and central Pennsylvania,” said Philip W. Guarneschelli, president and CEO. “PinnacleHealth has been executing on its vision for the future of healthcare in the region. Affiliation supports geographic expansion and introduces more choices for health insurance through a provider-sponsored health plan.”