Last year, news broke of an agreement between Highmark and West Penn Allegheny Health System (WPAHS) that would see the health plan acquire the hospital. As WPAHS has faced mounting debt obligations, this news was seen by many as a means to keeping WPAHS in business. Most importantly, it was viewed by many as an important component in preserving competition among hospital providers in the region, affording consumers the choices they deserve in their health care needs while also protecting health care-related jobs. The Pennsylvania Insurance Department has held public hearings on the affiliation agreement and has been working with all parties involved to review the agreement before providing ultimate approval.
In the last week, we have come to learn that the affiliation agreement, signed between Highmark and WPAHS in November 2011, was terminated by WPAHS. News reports suggest the termination was caused largely by Highmark’s insistence that WPAHS file for Chapter 11 bankruptcy protection in order to reorganize its near $1 billion debt obligation. Regardless of the reasons, I am very disappointed the merger between Highmark and WPAHS has been called off.
As the region’s second largest health system, the inability of WPAHS to continue offering health care services would be detrimental to thousands of consumers in the region. If they are not able to strike a deal with Highmark it seems WPAHS does not have many viable options. Are there other partners that would be willing to assume WPAHS’ large debt? If WPAHS can’t find another partner or another merger opportunity doesn’t materialize, doesn’t WPAHS still face the potential of bankruptcy?
The biggest losers in this situation are the consumers, who stand to be deprived of needed choices in their health care with the potential loss of a major health care provider. Thousands of employees will also be negatively impacted. Unfortunately, as we continue to witness, consumers and employees are often overlooked when battles take place in boardrooms.
Maybe the time has come to seriously consider implementing a single payer health care system in Pennsylvania? The Family & Business Healthcare Security Act, Senate Bill 400 (SB 400), is before the Senate Banking & Insurance Committee. This bill would reduce costs for consumers, allow consumers to pick their own doctor, allow consumers and their doctor to determine the best course of treatment (not an insurance company), prohibit denial of coverage due to pre-existing conditions, make health care consumer-based instead of employer-based and is portable. You can read more about the benefits of a single payer system in PA by visiting http://healthcare4allpa.org/.
Senator Wayne D. Fontana
42nd Senatorial District