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Allegheny Health, partner, purchase Klingensmith Healthcare

Allegheny Health Network has acquired majority ownership of the Ford City-based Klingensmith Healthcare medical equipment company.

Allegheny Health and Johns Hopkins Home Care Group made the purchase, but did not release terms of the deal Tuesday.

The eight-store Klingensmith Drugstore chain in Armstrong, Indiana and Clarion counties is unaffected by the sale. Klingensmith Healthcare operates independently of the retail company.

Klingensmith Healthcare employs 195 people, and provides home respiratory medical equipment for about 9,000 patients a year in Western Pennsylvania, West Virginia and Ohio.

Holzer said officials will evaluate Klingensmiths' current employees and anticipates adding more positions as early as the first quarter of 2015.

“Our goal is to grow and grow quickly, depending upon our success,” Holzer said. “We're expecting our growth to be considerable.”

Klingensmith Healthcare's CEO Dave Knepshield is expected to maintain minority ownership and will hold a managerial position, according to Holzer.

The system said Johns Hopkins' home care company will manage the firm and also bought a minority stake in Klingensmith.

Knepshield did not return a call seeking comments on the acquisition.

Officials declined to provide percentages for each owner's stake in the company and its annual revenue.

Holzer described Klingensmith as one of the largest independent providers of home medical supplies and services in the region.

Deal expands Allegheny Health's services

It's a deal that expands Allegheny Health Network system's offerings in the home care market as it tries to boost and diversify its revenue.

The hospital network, which lost money for years before being purchased by health insurer Highmark Inc. in 2013, is trying to capture patient revenue after they are discharged from its hospitals by selling them wheelchairs, hospital beds, oxygen tanks and other equipment, said Brian Holzer, senior vice president of the network's diversified businesses.

The system also is expanding its medical services, recruiting physicians and opening outpatient centers as it gears up for greater competition with UPMC, the region's biggest hospital system.

About 40 percent of people admitted to Allegheny Health's eight hospitals need equipment or home health services after being discharged, Holzer said.

The network recently bought Meadville-based Vantage Home Infusion Services, which provides at-home intravenous medication treatment. It also formed a joint venture with Celtic Healthcare Inc. of Mars to provide home care and hospice services.

“This gives us the infrastructure to continue growing to provide services to more people in their homes,” Holzer said.

Daniel Smith, president and CEO of Johns Hopkins Home Care Group, said his organization will focus on integrating Klingensmith's operations into Allegheny Health Network, while working on improving in-home services for patients.

“With the transition of bringing care to patients' homes, we can further our mission and explore new technology and models of home-care in a low-cost and safe setting,” Smith said. “It's an exciting opportunity.”

Klingensmith to be renamed

Allegheny Health Network expects to rename Klingensmith in a rebranding that also will include Vantage and the joint venture with Celtic.

It will be competing with MedCare Equipment Co., which is owned by a group of community hospitals in Western Pennsylvania and serves UPMC patients.

MedCare, which is managed by Greensburg-based hospital operator Excela Health, provides equipment and services to about 30,000 patients a year in the region and is owned by Excela, UPMC and five other hospital systems.

Brad Pedersen and Alex Nixon are staff writers for Trib Total Media. Pedersen can be reached at 724-543-1303, ext. 1337, or bpedersen@tribweb.com. Nixon can be reached at 412-320-7928 or anixon@tribweb.com.