Feds find proposed Highmark takeover of WPAHS no threat to competition

Apr 10, 2012 (Pittsburgh Post-Gazette - McClatchy-Tribune Information Services via COMTEX) -- The federal Department of Justice's antitrust division said today it is closing its investigation of Highmark's proposed takeover of West Penn Allegheny Health System, having found it no threat to competition.

"The proposed affiliation holds the promise of bringing increased competition to western Pennsylvania's health care markets by providing WPAHS with a significant infusion of capital and increases the incentives of market participants to compete vigorously," according to a department press release.

The department found that because Highmark owns no hospitals and "only a small number of physician groups" and because West Penn has no insurance arm, combining them wouldn't further consolidate either market.

"The hospital market in the Pittsburgh region is highly concentrated," according to the department's release. "Other than WPAHS, the only other significant hospital network is the University of Pittsburgh Medical Center (UPMC), the region's dominant hospital network." The department found that Highmark and UPMC control roughly 60 percent of the health insurance and health care markets, respectively.

"The [antitrust] division will continue to monitor developments in the Pittsburgh health care market as part of our broader commitment to vigilantly enforce the antitrust laws and thereby protect competition in our nation's health care markets," according tot he release.

Justice Department approval was viewed as one of several procedural hurdles that the proposed affiliation of Highmark and West Penn faced before formalization of the insurer's $475 million takeover of the region's number two hospital system.

Rich Lord: rlord@post-gazette.com or 412-263-1542.

___ (c)2012 the Pittsburgh Post-Gazette Visit the Pittsburgh Post-Gazette at www.post-gazette.com Distributed by MCT Information Services

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