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Analyst Discusses Possible Suitors For West Penn Allegheny

PITTSBURGH (KDKA) -- West Penn Allegheny says it needs a new partner and Highmark has filed a lawsuit to keep West Penn Allegheny from talking to anyone except Highmark.

But until a judge issues an order agreeing with that request, West Penn Allegheny is free to look.

When West Penn Allegheny accused Highmark of breaching their affiliation agreement, the next step was clear.

"I think we need another partner. I think that's a fair statement, but we have the time and the opportunity to do it," said David McClenahan, a member of the WPAHS board.

Who might be that partner?

Nobody is talking, but health consultant Jim McTiernan of TRIAD USA thinks there is likely partner out there.

"Health systems are no different than banks, airlines or insurance companies. They need to get bigger in this post-health care reform world," McTiernan told KDKA Money Editor Jon Delano.

One possibility -- the highly regard Cleveland Clinic.

"They offer two things. No. 1, they offer their reputation, which is obviously very high. And, No. 2, they offer the proven ability of knowing how to run a health system."

In a statement, the Cleveland Clinic spokesperson Heather Phillips said, "We always entertain all options, but there are no discussions with West Penn Allegheny at the moment."

McTiernan says another possible suitor is the Geisinger Health System in central Pennsylvania, which like UPMC, is both a health provider and an insurer.

"Very much like UPMC and actually a longer track record than UPMC in the health insurance business," added McTiernan.

Another model for West Penn Allegheny is the Vanguard Health systems that operates 13 medical systems and recently partnered with Detroit Medical paying off their debt and funding their pensions.

"They run very well regarded health systems," said McTiernan of Vanguard.

It may well be that the best partner for West Penn Allegheny is right here in Pittsburgh -- Highmark.

But the longer both sides accuse each other of bad faith, the harder it will be to bring them together again.

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