Hospitals target July 1 for merger

UPMC and Altoona Regional Health System, which have been exploring a possible merger for two years, hope to have it finalized by July 1.

Altoona Regional CEO Jerry Murray and Christopher Gessner, president of Children’s Hospital UPMC, both confirmed the date at Friday’s annual meeting of Altoona-Blair County Development Corp.

Gessner was the guest speaker at the breakfast meeting.

UPMC and Altoona are suited for one another mainly because their “cultures” are compatible, Gessner said.

UPMC is flexible, works well with independent doctors and is already the referral destination for many Altoona doctors and their patients, Murray has said.

The move toward a merger has been “transparent,” Gessner said.

It began at a board retreat two years ago, evolved into the work of multiple committees and included presentations from the main big-brother partner candidates, after Altoona Regional decided it needed to hook up with an organization that has at least $2 billion in annual revenues, Murray said.

At the time of the merger, UPMC hopes to begin bringing “value” to the local hospital, which it envisions as a central Pennsylvania “hub” for higher-level care, Gessner said. That level would be a step below the highest-level care available at UPMC’s Children’s and Presbyterian hospitals, he said.

Among the groups involved in choosing a partner and on all the criteria considered, 90 percent of the votes favored UPMC, which is a $10 billion organization, Murray said.

That near-unanimity hasn’t extended to the entire hospital: Registered nurses represented by Service Employees International Union Healthcare PA have obtained hundreds of signatures asking the hospital to reconsider the choice, given the questions about Highmark coverage.

But management has said it doesn’t plan to backtrack.

In contemplating the merger with UPMC, Altoona can take comfort in the big organization’s experience with “integrating” 11 hospitals into its system over two decades, Gessner said.

Those include academic and community, urban and suburban, religious and secular and general and specialty hospitals, according to Gessner.

Hamot in Erie, which merged with UPMC in 2011, is the one most like Altoona, except that its nearby Catholic institution didn’t merge with it previously, like Altoona’s Bon Secours Holy Family Hospital did here in 2004.

St. Vincent’s is now a pending acquisition of Highmark, creating a competitive situation in Erie that is absent here.

UPMC realizes health care is “way too expensive,” and is working to develop care models to help control costs, according to Gessner.

UPMC intends not to renew its contract to provide medical services to Highmark, as an outgrowth of the ongoing feud over Highmark’s acquisition of its own medical facilities. In the Pittsburgh area, that will mean Highmark members won’t have in-network access to most UPMC facilities.

Many of Highmark’s 44,000 subscribers here worried that after the current UPMC contract expires at the end of 2014, if the Altoona merger goes through, they would need to travel out of town for care.

Once the merger takes place, however, UPMC will seek a contract with Highmark for Altoona and UPMC Bedford, because both are “sole community hospitals,” Gessner told the group.

UPMC intends to “seek a contract with all payers” here, Gessner said.

Accessing care when a hospital is out of network is generally cost-prohibitive.

The intention to contract with Highmark, however, doesn’t mean UPMC will sign no matter what, said Gessner, UPMC’s “executive liaison” for the Altoona merger.

“Terms and rates must be fair and equitable,” he said. “This won’t be a contract at any cost. But it won’t be a policy decision [to refuse a contract] like in Pittsburgh.”

Highmark has said it wants to give its subscribers access to all UPMC facilities after 2014.

The intention to treat Altoona as a sole community hospital isn’t in writing or contractual, but UPMC has spoken of it to the Pennsylvania Insurance Department, said Gessner and UPMC attorney Mark Tamburri, who attended the meeting.

“It’s a commitment we’re going to make to the community,” Tamburri said.

UPMC spokeswoman Susan Manko previously told the Mirror there was an “assumption” UPMC would treat Altoona Regional as a sole community hospital and seek a Highmark contract.

Mirror Staff Writer William Kibler is at 949-7038.