Highmark to Acquire Pittsburgh's West Penn Allegheny Health System

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Highmark plans to acquire Pittsburgh-based West Penn Allegheny Health System for approximately $500 million, according to a Pittsburgh Tribune-Review report.

WPAHS will become a subsidiary of Highmark, which will assume approximately $1 billion in liabilities from the health system.

The potential acquisition may intensify the disagreements between Highmark and the University of Pittsburgh Medical Center, which ended contract negotiations with Highmark in early May due to the planned acquisition of WPAHS. The contract between the insurer and UPMC expires June 30, 2012.

WPAHS posted more than $48 million in operating losses during the first nine months of the 2011 fiscal year, which ends June 30, according to the report. Highmark reported a 146 percent increase in profits last year at $462.5 million.

The health system is expected to announce the arrangement with Highmark early this week.

Read the Pittsburgh Tribune-Review report on Highmark and West Penn Allegheny Health System.

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