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The Carlisle Regional Medical Center.

Carlisle Regional Medical Center will be under new ownership from PinnacleHealth, as the health system itself also works on pursuing an affiliation with the University of Pittsburgh Medical Center.

PinnacleHealth made both big announcements Tuesday, saying it is acquiring four of Community Health System’s hospitals, including CRMC, and has signed a letter of intent to pursue an affiliation with UPMC.

The acquisition of CRMC and three other Midstate hospitals comes after movement from CHS to sell off some of the health care properties it purchased from Health Management Associates, one of which was CRMC. The three other hospitals in the announcement are Heart of Lancaster Regional Medical Center in Lititz, Lancaster Regional Medical Center in Lancaster and Memorial Hospital in York.

The four hospitals will become part of PinnacleHealth’s not-for-profit health care system.

“Carlisle Regional Medical Center has been a vital part of the community for over 100 years, providing safe, compassionate, high-quality health care for our patients,” said David Steitz, chief executive officer of Carlisle Regional Medical Center. “Joining with PinnacleHealth will enable us to strenghten our valued relationships with the community.”

Acquisition

PinnacleHealth did not release numbers on how much it is paying as part of the acquisition, but South Middleton Township Supervisor Tom Faley said CRMC is assessed at $71.5 million, and township officials believe it’s possible the hospital could sell for $75 million. If that’s the case, he said, as part of the real estate transfer tax, the township would receive $375,000, based on that sales figure.

Faley said he’s hopeful about PinnacleHealth, having had a good experience himself with the health system.

“I believe that PinnacleHealth has a good name,” he said, noting that he was impressed after having had prostate surgery years ago at Harrisburg Hospital.

The transaction of all properties is expected to close in the summer, subject to customary regulatory approvals and closing conditions, according to the health system.

Kaufman, Hall & Associates LLC is acting as the exclusive financial adviser to PinnacleHealth on this transaction, and McNees Wallace & Nurick LLC is acting as its legal counsel.

PinnacleHealth currently owns three acute care hospitals – West Shore Hospital in Hampden Township, Harrisburg Hospital and Community General Osteopathic Hospital.

“We are excited to bring these quality hospitals, their employees and physicians into the PinnacleHealth family,” said Philip W. Guarneschelli, who was just named PinnacleHealth’s president and CEO this month after Michael Young’s sudden departure. “Together we will build on and strengthen their history of quality and success, and we look forward to continuing strong, collaborative relationships with employed and partnering physicians.

“Local employers and the business community want great quality care at affordable pricing for employees and their families, and we’re acting to meet that request,” he added in the news release. “We believe exceptional, cost-effective healthcare should be part of every community.”

Affiliation

In addition to expanding its hospital services, PinnacleHealth said in a news release it hopes an affiliation with UPMC will expand health care services and “continue to provide nationally recognized care in central Pennsylvania.”

The health system said an affiliation would offer a larger scope of health care choices for patients and give the hospital system the ability to recruit more top doctors.

PinnacleHealth said it has been exploring collaborative relationships with “compatible organizations.”

PinnacleHealth had, previously, been involved in merger plans with Penn State Hershey Medical Center. However, those plans fell through after the U.S. Third Circuit Court of Appeals in September overturned a decision to allow the merger. The Federal Trade Commission and state Attorney General’s office had opposed the merger, saying it would create a monopoly on health care services in the region.

UPMC has 25 hospitals and is the largest medical and behavioral health insurer in western Pennsylvania.

“Having PinnacleHealth affiliate with UPMC is an exciting opportunity for the system and central Pennsylvania,” Guarneschelli said in the release. “PinnacleHealth has been executing on its vision for the future of healthcare in the region. Affiliation supports geographic expansion and introduces more choices for health insurance through a provider-sponsored health plan.”

PinnacleHealth said both organizations have begun the due diligence process to work toward a definitive agreement to affiliate. The health system also noted in its release that there will be no changes for employees and physicians at this time.

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