The systems have partnered in some areas for years. Washington’s CEO calls it an ‘obvious choice.’
UPMC is planning to acquire the Washington Health System in western Pennsylvania, offering another indication that hospital mergers are picking up.
The two organizations said Tuesday they had signed a non-binding letter of intent to merge.
Washington Health System operates its flagship 278-bed Washington Hospital in Washington, Pa., along with a 49-bed hospital in rural Waynesburg, Pa. UPMC operates 40 hospitals and 800 other healthcare locations.
The Washington Health System Board of Directors met on June 1 and unanimously voted to pursue merger discussions with UPMC. The two systems will work over the next several months towards a definitive agreement. They said they aim to conclude the deal as soon as possible, but a more specific timetable was not offered. Regulators would need to approve the merger.
Late last year, Washington Health System invited proposals from larger health systems to form an affiliation.
Brook Ward, president and CEO of Washington Health System, said partnering with UPMC is the right decision for the present and the years ahead.
“Our primary focus is to ensure the residents of Washington and Greene Counties have local access to high-quality health care that is sustainable into the future,” Ward said in a statement. “After careful consideration and analysis, we believe the best path forward is to affiliate with UPMC to achieve that goal.”
“From our experience working with UPMC and knowing their track record of providing outstanding patient care, it was an obvious choice to select UPMC as our partner going forward,” Ward added.
UPMC and Washington Health System have already partnered in a number of areas in recent years, Ward noted.
UPMC’s Hillman Cancer Center has been providing treatment at Washington Hospital, and UPMC Children’s Hospital of Pittsburgh has offered specialty pediatric care, including neonatal care.
While healthcare mergers slowed down dramatically during the COVID-19 pandemic, more health systems have announced partnerships or initiated discussions to merge, including a high-profile deal involving another Pennsylvania system.
Kaiser Permanente has announced plans to acquire Geisinger Health, based in central Pennsylvania. Kaiser is forming a new organization called Risant Health, and Geisinger will be the first member. Risant also will be looking to acquire other systems.
BJC HealthCare of St. Louis and Saint Luke’s Health System of Kansas City announced May 31 that they plan to merge and form an integrated academic health system. The two systems plan to form an organization with 28 hospitals and $10 billion in combined annual revenue. Both systems are based in Missouri, but they note that they serve different markets.
The Federal Trade Commission has taken a closer look at hospital and health system mergers, and regulators have opposed some deals involving providers in the same market.
To avoid drawing the ire of regulators, more systems are looking to find partners outside of their own markets. Atrium Health and Advocate Aurora Health completed their merger last year to form Advocate Health. CommonSpirit Health has acquired providers from other areas.
In March, UnityPoint Health and Presbyterian Healthcare Services said they were exploring a merger. If they move forward, they would create an organization with more than 40 hospitals.
Industry analysts expect to see more hospital mergers in the coming months, and some of those deals may involve smaller hospitals and organizations looking to join larger systems to stay afloat.