Geisinger, Highmark announce joint venture
- Geisinger Health System and Highmark Health are forming a joint venture to improve care quality and reduce costs for patients in north central Pennsylvania.
- The two organizations signed a letter of intent Wednesday to explore creating a clinical network with comprehensive access for members in Highmark and Geisinger plans, including Medicare Advantage enrollees.
- Highmark President Deb Rice-Johnson told Modern Healthcare that the pact will allow Geisinger to be more competitive with UPMC, which forged a similar venture with Reading Health System last year.
The joint venture will initially focus on developing a new medical campus in rural Montoursville, PA, with the aim of improving population health.
“The goal of this new facility will be to deliver important medical services and clinical capabilities in the local community that are complementary to the advanced tertiary services available at Geisinger Medical Center,” Lynn Miller, president and chief administrative officer for clinical enterprise at Geisinger, said in a statement. “We are currently assessing community needs and levels of appropriate investment to meet those needs.”
Healthcare partnerships have been on the rise as providers and insurers look for ways to enhance outcomes while cutting costs. Rising expenses and declining admissions for hospitals has helped lead to robust M&A activity. Martin Gaynor, an economist at Carnegie Mellon University, recently told Healthcare Dive that not enough competition can be a real problemf or the country's healthcare system overall.
"Think of the market as the engine in a car," he said. "If you have engine trouble, the car won't run. It's important to have policies in place that enable and support competition so healthcare markets can work as well as they possibly can."
In March, UPMC announced plans to affiliate with Harrisburg-based PinnacleHealth System — a move that expand its footprint beyond its western Pennsylvania base into central Pennsylvania. The affiliation would also UPMC’s health insurance product in competition with Highmark and Capital BlueCross
Last September, Geisinger teamed up with St. Luke’s University Health Network to reduce health costs in 50 eastern Pennsylvania counties. As part of the deal, they planned to introduce a Medicare Advantage plan and other new plans for commercial and employer groups in the region.
Highmark is an affiliate of Blue Cross and Blue Shield.