Penn State

Penn State embarks on partnership with Highmark

Aerial shot of Penn State Milton S. Hershey Medical Center and Health System.
Aerial shot of Penn State Milton S. Hershey Medical Center and Health System. Photo provided

Penn State has found a new partner in its push to grow in the medical field.

Penn State Health and Highmark Health are embarking on a new relationship that will commit more than $1 billion between the two organizations’ “toward the development of a high-value, community-based health care network.”

According to the resolution passed by Penn State’s board of trustees in a telephone conference on Friday, the new effort brings Highmark into the Penn State fold, allowing the university’s officers to “enter such agreements with Highmark Inc., Highmark Health and Penn State Health as are necessary and advisable to provide for inclusion of Highmark Health as a minority member of Penn State Health.”

According to the materials presented to the board, Highmark Health becomes a “preferred partner” with Penn State Health. Highmark becomes the “second member” of Penn State Health, with Penn State remaining the majority member.

The new organization will have a 15-member board. Twelve of those members will come from Penn State Health and three from Highmark.

Penn State Health’s leadership team stays in place under the plan.

The two sides did make exclusive commitments to each other.

“Highmark Health will invest exclusively in Penn State Health in the region,” according to the board materials, while Penn State and Penn State Health will not go shopping to buy other health insurance companies.

Neither side is excluded from doing business with other entities, however. Highmark is permitted to work with other hospitals and Penn State is not limited in working with other insurance companies.

“This is a game changer,” Highmark President and CEO David Holmberg said. “We want to collaborate with forward-thinking partners who, like us, are committed to creating a positive health care experience for members and patients. Penn State Health shares this vision and, together, we’re going to lead the change for a better model of health care in the heart of Pennsylvania.”

The move comes just a month after Penn State President Eric Barron told his board that he wanted to see the university expand in health and medical research.

In 2016, Penn State and PinnacleHealth were moving toward a merger, but that fell apart and faced opposition from the Federal Trade Commission and the Pennsylvania attorney general. Pinnacle has since signed an agreement to be aquired by UPMC.

Meanwhile, in May, Highmark and Geisinger announced a joint venture.

Lori Falce: 814-235-3910, @LoriFalce