Highmark-Affiliated Penn State Health To Buy Holy Spirit Health System

Oct 16, 2019

Highmark-affiliated Penn State Health signed a letter of intent to buy Geisinger’s Holy Spirit Health System, five years after Geisinger acquired the hospital chain. The health systems aim to complete the deal by June 30, 2020, pending regulatory approval.

The sale includes Holy Spirit Hospital in Camp Hill, affiliated outpatient and urgent care facilities, and Ortenzio Heart Center and West Shore EMS, according to a press release from Penn State and Geisinger.

Geisinger and Penn State executives declined to estimate how much Holy Spirit would sell for, noting that the two health systems are working out the details.

The sale comes as both Highmark and UPMC are increasing their footprints in fast-growing Cumberland County.

Penn State Health partnered with Highmark Health in December 2017 and soon began building Hampden Medical Center within eyesight of UPMC Pinnacle West Shore, which opened in 2014. The Holy Spirit deal will not affect Penn State Health’s plan to open the Hampden Township facility, Penn State said.

Geisinger already works with Penn State Health on neurosurgery and cardiothoracic surgery, Geisinger CEO Dr. Jaewon Ryu noted. Geisinger also has a good relationship with Highmark, and recently agreed to a joint venture with Highmark in northeastern Pennsylvania.

“The new normal for health care is finding ways you can partner with other organizations and align interests for the betterment of serving the community and aligning health,” Ryu said.

Geisinger spent $120 million adding services at Holy Spirit since 2014, Ryu said. However, Holy Spirit has struggled to meet financial goals. The hospital lost $125.3 million in net income in 2018, according to Pennsylvania Health Care Cost Containment Council.

Penn State Health CEO Steve Massini said acquiring the hospital in a region where Penn State Health already is expanding helps to contain those costs. He noted, things such as ambulance services and administrative center that will be set up around the new Hampden Township hospital can also be used at Holy Spirit.

As for passing regulatory hurdles, Massini estimated that UPMC currently has more than 50 percent of the market share in Cumberland County.

Penn State does have a hospital in construction there, but that won’t be done until 2021, and he thinks Holy Spirit will make the area more competitive, and therefore, better for patients.

“We think, from a regulatory perspective, it makes sense,” Massini said. “It maintains strong competition and choice in the marketplace.”

This story was produced by our partner, WITF.