A PYMNTS Company

Affiliation agreement between West Penn Allegheny and Highmark approved by DOJ

By  |  April 10, 2012

The DOJ has closed its investigation into Highmark’s affiliation agreement with West Penn Allegheny Health System (WPAHS) after determining that the agreement would be pro-competitive. WPAHS is the second-largest hospital network in the Pittsburgh area (second to the University of Pittsburgh Medical Center (UPMC)) and Highmark has a market share that exceeds 60 percent. However, the DOJ found that competition in the markets for hospital, physician and insurance services would be enhanced “by providing WPAHS with a significant infusion of capital and increases the incentives of market participants to compete vigorously.” Moreover, Highmark’s $475 million financial commitment to WPAHS will allow the hospital to compete more effectively with UPMC.

    Get the Full Story

    Complete the form to unlock this article and enjoy unlimited free access to all PYMNTS content — no additional logins required.

    yesSubscribe to our daily newsletter, PYMNTS Today.

    By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions.

    The affiliation agreement is a vertical arrangement between Highmark, an insurer, and WPAHS, a hospital network. The agreement calls for a new nonprofit parent company that will hold all the corporate membership rights in Highmark and WPAHS. Upon investigation, the DOJ concluded that horizontal competition between the parties will not be affected by the agreement.

    We’d love to be your preferred source for news.

    Please add us to your preferred sources list so our news, data and interviews show up in your feed. Thanks!

    Add as Preferred Source

    Full content: DOJ Press Release

     

    Related content: Merger Remedies: Lessons from the Evanston Northwestern Healthcare Decision (Toby Singer, Jones Day)