In June 2011, Highmark, a Pittsburgh-based health insurer, announced it would acquire WPAHS and would inject $475 million of funds into the financially beleaguered health system. By the end of fiscal year 2011, WPAHS had received $100 million from Highmark, but it still ended the year with an operating loss of $75 million. So far this year, as of March 31, 2012, WPAHS has lost $88 million.
Moody’s said WPAHS’ outlook also remains negative, as WPAHS appears to need more capital and operating funds over the next two years. As of March 31, 2012, WPAHS only had 45 days cash on hand, or $203 million of unrestricted cash, and that is accounting for the $100 million already provided by Highmark. “Our current rating incorporates our belief that Highmark will be willing and motivated to provide further support,” according to the Moody’s report.
The Highmark-WPAHS deal is still awaiting regulatory approval, which could be announced in the fall.
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