Jameson Health System gets state clearance to merge with UPMC
A long-delayed merger between health giant UPMC and cash-strapped Jameson Health System should move forward with clearance from an independent arbitrator, officials at New Castle-based Jameson said Thursday.
UPMC and the Pennsylvania Attorney General's Office, which has opposed the $80 million merger for more than a year, must finalize terms of a consent decree to avoid potential antitrust concerns, Jameson spokeswoman Lisa Lombardo said.
“There is still work to do until the deal is final,” she said.
Jeffrey Johnson, a spokesman for Attorney General Kathleen Kane, said the office is disappointed but plans to honor the ruling.
“It was our goal to serve as a watchdog for consumers, and all of our actions in this case were geared to accomplishing that goal,” he said.
Jameson's board, which disclosed the deal in September 2014, initially expected the state to approve it by March.
However, Kane's office rejected the merger out of concern that it could reduce competition in the region and drive up medical costs.
The dispute began after UPMC announced plans to invest money to help pay off debt, improve aging facilities and purchase equipment for clinical programs.
In August, Kane's office provided a list of more than 20 unnamed for-profit and nonprofit providers for Jameson to pursue. Jameson did not disclose the names of the three that submitted bids. But Lombardo said Jameson officials had questions about their plans for capital improvements, plans for servicing debt, how the newly formed entity would be run and long-term plans for the health system. Jameson wanted to stick with UPMC, and the health giant remained dedicated to the deal.
The arbitrator, former Chief Judge Donald Ziegler of the Western District of Pennsylvania, ruled in Jameson's favor this week after a sealed Jan. 20 hearing. Johnson said the process was sealed “due to the delicate nature of the situation.”
UPMC declined to comment.
“We won this issue, and we are happy that the arbitrator agreed with us that none of the bids met the qualifications necessary to serve the interests of Lawrence County residents,” Lombardo said. “We are grateful to have received a favorable ruling that supports our goal to ensure a future of long-term access to high-quality health care for the 90,000-plus residents of Lawrence County.”
Johnson said he hopes the negotiations with UPMC are swift.
“We are prepared to move forward in the process and work toward a consent decree with UPMC,” he said.
Ben Schmitt is a Tribune-Review staff writer. Reach him at 412-320-7991 or bschmitt@tribweb.com.
