May 31, 2024 By Karen Mansfield and Mike Jones 5 min read

Observer-Reporter

Washington Health System’s merger with UPMC has been approved by the attorney general’s office.

The Office of Attorney General on Thursday approved Washington Health System and UPMC’s plan to merge.

WHS said the merger will expand local access to high-quality health care for patients in Washington and Greene counties.

“WHS is looking forward to the next steps of finalizing this affiliation, which will preserve health care and jobs within our community,” said Stephanie Wagoner, WHS Manager of Marketing and Community Relations.

The attorney general’s office, WHS and UPMC reached an agreement that addresses the attorney general’s concerns about the transaction’s potential impact on patients, staff and the community.

“This transaction will keep Washington Hospital open and available to thousands of Pennsylvanians,” said Attorney General Michelle Henry. “It is essential that the transaction promotes the interest of patients, hospital employees and the community. My office did a comprehensive review and reached this agreement with UPMC and (Washington Health System) to ensure those protections are in place.”

According to the agreement, UPMC Washington – the hospital’s new name – must negotiate with any willing health insurance plans, and commit to a single, last best offer arbitration, to resolve any disputed contract terms.

“We’re pleased that our affiliation with the Washington Health System has been approved by the Pennsylvania Attorney General and we look forward to completing the process so that we can serve the residents of Washington and Greene counties,” said Paul Wood, vice president and chief communications officer at UPMC.

WHS and UPMC signed a definitive agreement on Oc. 18, 2023, for an affiliation.

Under the terms of the agreement, UPMC has pledged to invest a minimum of $300 million in capital in WHS over the next decade and to continue all key services including women’s health, cardiac surgery, and behavioral health for the next 10 years.

According to the agreement, all 2,700 jobs at Washington Hospital will be retained.

Care partner Cindy Orris, EKG tech Melissa Duan and Marisa Petro, a certified central services technician, issued a statement on behalf of SEIU Healthcare Pennsylvania members working at Washington Hospital. The two said the union and its workers are “dedicated to protecting quality patient care and good jobs for our community” and will hold UPMC to its promises made in the agreement.

“While that agreement has important protections, it should have done more to guarantee our facilities will remain open and no jobs or services will be cut,” the statement reads. “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.”

The workers added they are concerned that UPMC “has consistently gone back on its word with takeovers of other local hospitals,” so the union will be watching closely as the acquisition moves forward.

“The healthcare workforce is already struggling with a severe staffing crisis, the lingering effects of the pandemic, turnover, burnout and inflation,” the statement reads. “Any cuts – such as the service terminations, closures, layoffs and pay reductions that UPMC has carried out across its system – would be devastating to Washington. UPMC must instead, as promised, invest significant resources in our workforce and the care we deliver.”

The ailing hospital system had been operating on thin margins before the COVID-19 pandemic, and the pandemic had an enormous impact.

The hospital is on pace to lose $34.5 million this year and is facing losses exceeding $40 million next fiscal year, Ward said.

State Rep. Tim O’Neal, who has been a vocal advocate of the acquisition, said Thursday he was “very excited that we can begin to move forward” and continue to offer health care services for people living in Washington and Greene counties. O’Neal, R-South Strabane, said his biggest concern was Washington Health System’s sustained losses in recent years in the aftermath of the COVID-19 pandemic, but he thinks UPMC will be able to stabilize the situation.

“That’s why I thought it was important to move forward with this deal because, quite frankly, the health system is in trouble and the health industry with independent systems will continue to struggle with the way they’re reimbursed and compensated, along with the rise of health-care costs overall,” O’Neal said. “I think it’s something we’ll continue to see across the board with the consolidation of these health systems.”

He admitted that he would have preferred that Washington Health System remain independent, but he didn’t think that was possible with the financial loss, which he was concerned could ultimately lead to hospital closures.

“The situation was getting worse, not better,” O’Neal said. “Without the acquisition, we almost certainly see the loss of services as the health system looks to control the bleeding, so to speak.”

For the past several decades, WHS and UPMC have collaborated in several areas, including clinical partnership with UPMC Hillman Cancer Center based at Washington Hospital and UPMC’s Heart and Vascular Institute.

Washington Health System includes Washington Hospital, WHS Greene (which will be called UPMC Washington and UPMC Greene), and more than 40 off-site locations throughout three counties, including the Wilfred R. Cameron Wellness Center.

UPMC operates 40 hospitals, including four regional hubs, and intends to make Washington Hospital a hub.