Highmark aims to extend its reach into Westmoreland County [Tribune-Review, Greensburg, Pa.]

March 31--Insurance giant Highmark Inc. is attempting to extend its corporate footprint into Westmoreland County by recruiting doctors to join its West Penn Allegheny Health System, according to a company spokesman.

More than two dozen physicians specializing in family practice and internal medicine met on Thursday evening in the Ramada Hotel & Conference Center in Hempfield to hear a pitch about affiliating with West Penn Allegheny from officials that included former Allegheny County Executive Dan Onorato, who serves as Highmark's vice president of external affairs and communication.

Last year, Highmark announced its acquisition of the West Penn Allegheny system, a deal that is awaiting state approval.

Onorato declined to comment about the private meeting, but spokesman Michael Weinstein said Highmark officials have been meeting with physicians from community-based health-care systems outside of Allegheny County about acquiring their practices or forging affiliations. He said the company also is attempting to develop partnerships with local hospitals in its ongoing battle with dominant rival UPMC.

Weinstein said by purchasing or affiliating with West Penn Allegheny -- the region's second largest hospital network -- the physicians would agree to send their patients exclusively to the system's hospitals, Allegheny General Hospital in Pittsburgh'sNorth Side, West Penn Hospital in the city's Bloomfield section and Forbes Regional Hospital in Monroeville.

Earlier this year, Highmark officials said they would spend up to $500 million to develop a network of doctors, community hospitals and outpatient locations in Western Pennsylvania. The network would include medical malls, ambulatory care centers, a health information exchange, partnerships with community hospitals, and primary and specialty care centers.

Those attending the Hempfield meeting represented a mix of physicians in independent practices and doctors affiliated with Excela Health, the dominant provider in Westmoreland County.

Weinstein said Highmark is seeking opportunities to partner with Excela.

"We have approached Excela about possible ways to work together in the marketplace," Weinstein said.

Excela Chief Executive Officer Robert Rogalski said yesterday that Highmark's efforts to recruit physicians in the area poses a direct challenge to his system.

"We did know about (the meeting). They've been trying to build an employee network and agreements with private practices aggressively for the past two years," Rogalski said.

To counter inroads from Highmark and UPMC in Monroeville, Excela is expanding operations in the western end of the county by expanding an existing medical mall in North Huntingdon from 35,000 to 87,000 square feet.

"We have a significant market share in North Huntingdon," Rogalski said. "A large number of people from that area drive to Greensburg and other locations for health care. It makes sense for us to make it a more convenient site."

Rogalski said Highmark is appealing to the region's independent physicians, who serve as a pipeline for patients from their practices to the hospitals. He said 40 percent of Excela's patient volume comes from independent physicians who refer their patients to one of Excela's three hospitals in Greensburg, Latrobe and Mt. Pleasant.

He said he would like Excela to remain neutral in the Highmark/UPMC dispute because the system has relationships with both entities. Excela co-owns the Arnold Palmer Cancer Pavilion with UPMC and derives a large source of its income from reimbursements from Highmark.

"For today, we'd like to have a good relationship with both," he said.

Excela has a 60 percent share of the health care market in the county, according to corporate rating agency Moody's, and needs to maintain its foothold in the western end of the county in the face of "formidable competition" from UPMC and Highmark.

Excela operating revenue has increased 32 percent, reversing a three-year downward trend, according to the rating agency.

Rogalski said Excela earned $1.3 million in operating revenue last year and an additional $36 million in investment income.

"We're extremely stable financially," he said.

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