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BHS, Heritage Valley make merger bid

Joint proposal submitted for Jameson Health System

The Butler Health System and the Beaver County-based Heritage Valley Health System submitted a joint proposal to merge with the Jameson Health System, according to the Lawrence County Commissioners.

Commissioners Robert Del Signore and Dan Vogler, board chairman, said they are aware of the offer from Butler and Heritage Valley, but they do not have information regarding the specifics of the proposal.

Butler Health System officials declined to discuss the bid, and a spokesman said the hospital was not part of ongoing negotiations with Jameson.

“We are not participating in Jameson’s process at this time,” said Jana Panther, director of marketing.

Heritage Valley officials in Beaver County did not return multiple messages seeking comment on the bid.

Jameson officials said confidentiality agreements prevented them from discussing any of the bids, and a spokesman for the state attorney general’s office, which is overseeing the bid review process, declined to discuss the matter.

“It would be premature to get into specifics,” said Jeffrey Johnson, the attorney general office’s spokesman.

Information about Jameson’s rebid process has been tightly controlled since this summer after state officials from the attorney general’s office refused in June to approve an already-signed merger between Jameson and UPMC.

Jameson has said that financial struggles spurred its decision to seek the partnership. UPMC would have assumed $40 million in long-term debt as part of the deal, as well as $15 million in outstanding pension obligations.

The office denied that merger, saying it was concerned that a Jameson-UPMC partnership, valued at $80 million, would control too much of the in-patient health care market in Lawrence County.

State officials told Jameson to seek additional bids.

In October Jameson officials announced they had received and reviewed three bids, calling them insufficient. State officials disagreed, and the hospital subsequently pledged to continue negotiations with the bidders, which it declined to name.

Del Signore said he believes the UPMC proposal, which expires on Dec. 31, is still the front-runner for Jameson.

“It seems as if they’re negotiating at this point still to try to get that deal with UPMC and Jameson,” Del Signore said. “I know the (attorney general’s office) isn’t real keen on it, but at the same time the other proposals that (Jameson) received were not nearly adequate from what we can tell, compared to what UPMC proposed.”

Del Signore said the Lawrence County commissioners have been receiving weekly updates from Jameson regarding the merger process. However, Vogler said it’s been nearly a month since officials received “any communication” from the health system.

Vogler, who is on the board at the Jameson Care Center in Neshannock Township, which is a Jameson subsidiary, said he expects an update from the hospital system next week.

He said the county’s concerns regarding the situation have remained the same since commissioners visited Harrisburg in June to meet with attorney general officials and discuss the state’s reservations regarding the Jameson-UPMC merger.

“From an economic standpoint, we want it (Jameson) to stay our largest employer,” Vogler said. “I think the community’s primary concern is that we continue to have a viable health care provider in the greater New Castle area.”

Vogler said he “wasn’t totally surprised” by the Butler-Heritage Valley bid, but he has been surprised by the lack of offers Jameson received during the rebidding process, which was fast-tracked and began in September.

“If anything did surprise me, it was the fact that there were as few proposals as there were,” Vogler said.

When a deal might finally get done is unclear, the commissioners said.

Del Signore said it seems as if negotiations are set to continue for months.

“Just from the weekly updates, it seems like it’s going to go into February,” he said, “and UPMC is still in that conversation.”

Susan Manko, UPMC’s director of media relations, did not respond to multiple messages left seeking comment on the UPMC proposal.

Vogler said, “I hope it can be resolved in one fashion or another, sooner rather than later because right now there’s a fair amount of uncertainty as to what direction this will ultimately take,” he said.

The Butler-Heritage Valley bid is not be the first joint venture between the two health systems.

In October they announced a partnership to create the Butler-Heritage Valley Multispeciality Group. The group’s first subspecialty practice, PA Brain & Spine Institute, begin offering services this month at its offices on East Jefferson Street in Butler.

Butler has a medical staff of more than 300 physicians, nearly 30 diagnostic testing locations and four urgent care centers. The system serves Butler, Allegheny, Armstrong, Clarion, Lawrence and Venango counties.

Heritage Valley has two hospitals in Beaver and Sewickley, 60 physician offices and 18 satellite facilities.

Jameson has two hospital campuses in New Castle, and offers inpatient acute care and outpatient hospital services. The system has 25 facilities, 250 physicians and more than 1,300 employees.

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