Highmark Pursues West Penn System in Insurer-Hospital Deal

Highmark Inc., a private U.S. insurer, is pursuing an affiliation with a hospital system based in Pittsburgh to help lower costs and improve coordination in health care.

Highmark, also based in Pittsburgh, would provide $50 million to the system immediately and invest as much as $475 million over the next four years under the terms of the deal, West Penn Allegheny Health System said in a statement on its website yesterday. Highmark operates Blue Cross and Blue Shield plans in Pennsylvania and West Virginia, and employs more than 19,500 people nationally, according to its website.

The managers and boards of the insurer and the health system are continuing talks aimed at reaching a final agreement.

The Wall Street Journal reported the deal earlier today.

To contact the reporter on this story: Kristen Hallam in London at khallam@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net

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