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Highmark, West Penn Get State Approval on Merger

The deal to merge Highmark and the West Penn Allegheny Health System has cleared another hurdle, but with a few warnings.

The Pennsylvania Insurance Department has given approval to the transactional filing that would bring together the nonprofit organizations and create an "integrated delivery network."

The approval came with a list of conditions from Insurance Commissioner Michael Considine, including the expectation that the new entity will “promote continued competition in the region,” “monitor the impact of the transaction on community hospitals” and “reduce the financial risk to Highmark and its policyholders associated with continued financial commitments to West Penn.”

“Our goal from the outset was to have a comprehensive, transparent review in order to make a fully informed and well-founded determination," Consedine said in a written statement. "We have met that goal.”

Gov. Tom Corbett also released a statement reading in part, “The goals for the commonwealth are to improve healthcare access, quality and affordability. Today’s decision is an important step toward making these goals a reality in western Pennsylvania. This affiliation also protects thousands of jobs of hardworking people who provide critical care in our local communities.”

Leadership of the Service Employees International Union, which represents many West Penn employees, say they are “pleased and excited” by the ruling.

“With the approval of this affiliation today, we can all now focus on the most important thing for our patients and Western Pennsylvania: building a patient-centered, high quality integrated delivery network for the people of western Pennsylvania,” said Cathy Stoddart, a registered nurse at Allegheny General Hospital and SEIU executive board member.

The order takes effect immediately.