Health insurer Highmark is buying a controlling interest in Erie, Pa.-based St. Vincent Health System for $65 million.
The purchase is the latest for the Pittsburgh-based insurer’s $1 billion effort in creating a health care delivery system that can compete with bigger insurers, like University of Pittsburgh Medical Center. Highmark bought the controlling interest in Jefferson Regional Medical Center for about $375 million. The deal also included Highmark backing Jefferson’s pension plan, which was underfunded by about $50 million.
As part of the St. Vincent deal, Highmark will pay more than $45 million over the next three years to the struggling system, which posted an operating loss of $4.7 million last year.
Another deal, however, with West Penn Allegheny Health System and its five hospitals, has soured over debt restructuring. Highmark and WPAHS have moved the disagreement over the $475 million deal into court. Most recently, a judge granted Highmark a preliminary injunction that prevents WPAHS from seeking other suitors. Since then, officials from both Highmark and WPAHS have issued statements that senior leaders have met and had a “productive session.”
Highmark recently opened its newest retail insurance store in Erie.