1/28/1997

PITTSBURGH, January 28, 1997 — Officials at Passavant Hospital in McCandless and the University of Pittsburgh Medical Center (UPMC) in Oakland today announced that they will sign a letter of intent to merge the two organizations.

According to Ralph T. DeStefano, president and chief executive officer of Passavant, the hospital's Board of Trustees voted on Monday, Jan. 27, to enter into formal merger discussions with the university, with the goal of completing the merger by mid- to late summer. Under this new structure, Passavant Hospital will remain an independent entity within the UPMC system.

"This represents a potentially historic development for Passavant and its community," Mr. DeStefano said. "Passavant's long-standing commitment to community and customer service -- in combination with UPMC's comprehensive clinical programs and resources -- would provide our neighbors with unparalleled access to quality medical care. These are two very strong organizations coming together to advance health care in the region north of Pittsburgh."

"In this partnership, UPMC is making a commitment to the residents of this community and to the outstanding medical institution that has historically served them," said Jeffrey Romoff, UPMC president. "Our goal is to build on this foundation of excellence, enhance and strengthen it as we bring the resources of this area's only academic medical center to the North Hills."

Beginning immediately, representatives from Passavant and UPMC will be negotiating the terms of the proposed merger. The partnership is designed to result in the significant expansion of health-related services, facilities and programs in the region north of Pittsburgh.

As a result of the proposed merger, a broad scope of tertiary-level UPMC services and research protocols would be made available at Passavant.

"UPMC is the area's leading provider of advanced medical services," said Mr. DeStefano. "By combining its tertiary-level programs with Passavant's long commitment to service and quality, we are making it possible for our neighbors to receive the most advanced care available today without leaving the North Hills. This will enable us to advance our mission in the community in ways that we could not achieve independently."

"In partnership with Passavant, the UPMC intends to become the major health-care provider in northern Allegheny and southwest Butler counties," Mr. Romoff said. "It is our full intention to export the most sophisticated diagnostic and treatment services from Oakland to the campus that will be known as UPMC Passavant. Thus, the ultimate beneficiaries of this merger will be the citizens of this area, who will have access to the best medical science has to offer in a comfortable suburban complex that already has an excellent reputation in patient care."

Under the proposed agreement, Passavant Hospital would become a subsidiary of UPMC. It would retain its own Board of Trustees and medical staff. The hospital will remain an acute-care facility.

As a result of the proposed merger, hospital officials believe that the expansion of programs, facilities and services at Passavant will create additional employment opportunities and enhance Passavant's position as the leading employer and an important community asset.

Both UPMC and Passavant are members of the Tri-State Health System, a network of seven health-care providers in southwestern Pennsylvania. In 1994, the two organizations signed an affiliation agreement, which has led to joint purchasing arrangements, clinical partnerships and a number of other projects.

Passavant, established in 1849, was the first Protestant hospital built in the United States. In 1964, Passavant moved from the City of Pittsburgh to its present location, where it serves the communities of northern Allegheny and southern Butler counties. More than 1,200 employees and 520 physicians share Passavant's commitment to providing high-quality, cost-effective services, with an emphasis on personal caring and customer satisfaction.

As the area's only academic medical center, the UPMC ranks No. 10 in the nation in terms of federal funding for research. It enjoys a worldwide reputation for excellence in the provision of a full array of specialty services in such areas as cancer, human genetics, orthopaedic surgery, psychiatry, cardiology and transplantation. The UPMCS (University of Pittsburgh Medical Center System) is meeting the challenges presented by the changing health-care industry by developing an integrated, comprehensive health-care delivery system throughout western Pennsylvania.