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Penn State Health and Highmark Health join forces to create a high-value, community-based health care network for members and patients

Two of Pennsylvania's health care leaders come together to invest $1 billion in the future of health care in central Pennsylvania

Hershey, Pa. (Dec. 15, 2017) — Two of Pennsylvania's leading health organizations, Penn State Health, and Highmark Health, today announced plans for an innovative strategic partnership aimed at securing the future of health care in the region.

At the heart of the new strategic partnership are plans for a collective investment by Penn State Health and Highmark Health of more than $1 billion toward the development of a high-value, community-based health care network designed to keep care local and enhance collaboration with community physicians. The community network will be anchored by the advanced care provided by the Milton S. Hershey Medical Center, the region's only university teaching and research hospital.

"This exciting partnership is a commitment by our organizations to ensure that health care delivery in our region remains patient-focused, enhances overall health and wellness and creates increased opportunity for collaboration with community physicians," said Dr. A. Craig Hillemeier, dean, Penn State College of Medicine; chief executive officer, Penn State Health; and senior vice president for Health Affairs, Penn State. "Penn State Health will offer more primary, specialty and acute care locations across central Pennsylvania so that our friends, families and neighbors will have easier access to our care, right in the communities where they live. Our two organizations share the belief that people facing life-changing diagnoses should be able to get the care they need as close to home as possible."

The new Penn State Health and Highmark Health strategic partnership is focused on improving access, quality and affordability of health care close to home for people across south central Pennsylvania, while creating new opportunities for medical education and research. Core to that vision is the creation of a community network to support the population health and local needs of patients and members. This value-based approach will reimburse health care providers for the quality of care they provide rather than for the volume of services, as part of a strategy to reform how quality health care is delivered and paid for.

"This is a game changer," said David Holmberg, president and CEO, Highmark Health. "We want to collaborate with forward-thinking partners who, like us, are committed to creating a positive health care experience for members and patients. Penn State Health shares this vision and, together, we're going to lead the change for a better model of health care in the heart of Pennsylvania."

Highmark Health will join Penn State as a member of Penn State Health, with a minority interest, that will provide up to three seats on the 15-member Board of Directors.

Both organizations received respective board approvals this week to move ahead with this new strategic partnership.

Goals of the strategic partnership include:

  • Development of a value-based, community care network, including new facilities, to ensure patients and members in central and southcentral Pennsylvania are in close proximity to needed primary care, specialty care and appropriate acute care hospital settings.
  • Reinforce the role of the Milton S. Hershey Medical Center and Penn State Children's Hospital as the premier destinations for advanced care in the region for adults and children, with the goal of ensuring no patient needs to leave the region for complex care.
  • Development of advanced population health management capabilities, analytics and care models to more effectively manage chronic conditions, enhance health and wellness, deliver improved outcomes and a lower total cost of care for patients, members and the community.
  • Exploration and development of innovative, patient-focused co-branded health care insurance products.
  • Expansion of support for Penn State College of Medicine through funding for medical and health sciences education, and advanced research.

"We are committed to improving health and access to care in the communities we serve across Pennsylvania," said Deborah Rice-Johnson, president, Highmark Inc. "Collaborating with high-value providers such as Penn State Health is one more way that we are helping to ensure that our members will continue to have access to affordable, high-quality care. The bold strategy that we are embarking on in the region is focused on getting health care right for our members."

Independent community physicians will be a foundational part of the Penn State Health and Highmark Health approach to community-based care. For example, in Berks County, Penn State Health St. Joseph exemplifies what it means to keep care in local communities by expanding local access to primary and specialty health care services.

"We will continue our valued partnerships with independent private practice physicians to develop a community-based provider network," said Dr. William M. Bird, senior vice president for Penn State Health. "Our goal is to keep care in the community while enhancing local access to specialty care. This partnership will help us do just that."

The strategic partnership does not affect patients' care or insurance coverage. Under the terms, Penn State Health remains free to contract with other health care insurance companies, now and in the future. Penn State Health's existing health insurance agreements will remain in place. Likewise, Highmark Health's payer arm, Highmark Inc., will be free to contract with other hospitals and health systems, and its existing agreements with other health care providers in the region will remain unchanged.

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Megan Manlove
Penn State Health

Leilyn Perri
Highmark Health


Penn State Health is a multi-hospital health system serving patients and communities across central Pennsylvania. It employs more than 13,000 people system-wide.

The system includes Penn State Health St. Joseph Medical Center in Reading, Pa., Penn State Health Milton S. Hershey Medical Center, Penn State Children's Hospital, Penn State Cancer Institute, and Penn State Health Rehabilitation Hospital (jointly owned), based in Hershey, Pa., as well as more than 1,400 physicians and direct care providers at more than 100 medical office locations. The system also has jointly owned health care providers, including Hershey Outpatient Surgery Center, Hershey Endoscopy Center, Horizon Home Healthcare, and the Pennsylvania Psychiatric Institute.

Penn State Health shares an integrated strategic plan and operations with Penn State College of Medicine, the University's medical school. With campuses in State College and Hershey, Pa., the College of Medicine boasts a portfolio of more than $100 million in funded research and more than 1,700 students and trainees in medicine, nursing, other health professions and biomedical research.

Highmark Health, a Pittsburgh based enterprise that employs more than 40,000 people nationwide and serves nearly 50 million Americans in all 50 states, is the second largest integrated health care delivery and financing network in the nation based on revenue. Highmark Health is the parent company of Highmark Inc., Allegheny Health Network, and HM Health Solutions. Highmark Inc. and its subsidiaries and affiliates provide health insurance to nearly 5 million members in Pennsylvania, West Virginia and Delaware as well as dental insurance, vision care and related health products through a national network of diversified businesses that include United Concordia Companies, HM Insurance Group, Davis Vision and Visionworks. Allegheny Health Network is the parent company of an integrated delivery network that includes eight hospitals, more than 2,800 affiliated physicians, ambulatory surgery centers, an employed physician organization, home and community-based health services, a research institute, a group purchasing organization, and health and wellness pavilions in western Pennsylvania. HM Health Solutions focuses on meeting the information technology platform and other business needs of the Highmark Health enterprise as well as unaffiliated health insurance plans by providing proven business processes, expert knowledge and integrated cloud-based platforms. To learn more, please visit

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