UPMC Acquires Washington Health System

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Dive Brief:

• The University of Pittsburgh Medical Center has completed its acquisition of two-hospital Washington Health System, a year after the Pennsylvania-based providers revealed plans to combine.
• UPMC, one of the state’s largest healthcare networks with 100,000 employees, said it will invest at least $300 million over 10 years to improve clinical services and upgrade facilities at the hospitals, now renamed UPMC Washington and UPMC Greene.
• Federal regulators didn’t move to stop the purchase, and the Pennsylvania attorney general said she reached an agreement with UPMC that aimed to preserve access to affordable care. 

Dive Insight:

The deal has faced pushback from union leaders. In an op-ed published last fall in the Observer-Reporter, the chapter president of union SEIU Healthcare Pennsylvania at Washington Hospital argued UPMC has a history of buying up and closing local hospitals, as well as maintaining lower staffing standards and pay for workers. 

The union pushed for an agreement with the state’s attorney general, which includes provisions that require the newly combined provider to honor existing employment contracts, limit noncompete agreements and negotiate with willing health plans. 

Although the agreement includes key protections, union leaders said more could be done to make sure facilities stay open without service or job cuts. 

“We are united to hold UPMC accountable to abide by the agreement as well as honor the promises that have been made to our community to invest $300 million and maintain all services, insurance plan access, jobs and union contract standards,” SEIU’s Cindy Orris and Melissa Duran said in a Monday statement to Healthcare Dive.

In the run-up to the deal close, UPMC — and local policymakers — had argued the acquisition was necessary to keep financially struggling Washington Health open. In April, JoJo Burgess, mayor of the city of Washington, Pennsylvania, said nearly 300,000 residents would be forced to travel into Pittsburgh if the facilities shuttered, and nearly 3,000 jobs could be lost. 

“This affiliation protects the vitality of an essential community asset and solidifies a healthy future for Washington and Greene counties for generations to come,” Brook Ward, president of UPMC Washington and UPMC Greene, said in a Saturday statement.

The deal comes shortly after UPMC said it would lay off about 1,000 workers, primarily in nonclinical and administrative roles. The health system reported a $24 million loss in the first quarter ended March 31, compared with a $191 million gain in the first quarter last year.