Affiliation of Highmark and West Penn Allegheny Hospital System

Meg Guerin-Calvert served as the economic expert for the Pennsylvania Insurance Department (PID) to assist with the PID’s evaluation of the potential competitive effects and benefits to the public interest of the insurance buying public of the proposed affiliation between Highmark, Inc. and West Penn Allegheny Hospital System (WPAHS) and resulting reorganization including the creation of an integrated delivery network (IDN). Compass Lexecon worked extensively with the PID and their outside counsel Blank Rome LLP (Lawrence Beaser, William Gramlich, William Roberts and Ray Shapiro) and financial consultants from Blackstone to review filings, reports and information provided to the PID, including those from various health care providers, insurers and other stakeholders in Western Pennsylvania, to evaluate the potential competitive effects and benefits to the public interest of the affiliation. Ms. Guerin- Calvert submitted an expert report addressing vertical integration, competitive effects in insurance and hospital services, benefits from integrated delivery systems and empirical assessment of claimed benefits and evaluating potential remedies such as firewall policies. The affiliation between Highmark and WPAHS was approved by the PID in on April 29, 2013, subject to a number of conditions including, inter alia, ones aimed at protecting consumers and preserving competition. Ms. Guerin-Calvert was supported by a Compass Lexecon team including Susan Manning, David Weiskopf, Mary Coleman, and Jeff Raileanu.