Penn State Health and Highmark officially kicked off construction Friday of the $200 million Hampden Medical Center, a hospital and community health facility to be located on Good Hope Road, just off Wertzville Road, in Hampden Township.

In a ceremony replete with Nittany Lion-branded golden shovels, company leaders celebrated the beginning of a hospital that will allow Cumberland County patients to receive in-network treatment without having to venture to Hershey Medical Center, Penn State Health’s flagship facility.

Around 2,000 inpatients per year could be seen at the Hampden hospital instead of Hershey, according to Alan Brechbill, Penn State Health’s head of operations. Further, the cost to patients and their insurer — namely Highmark — will be lower for most procedures relative to having everything done at the research hospital in Hershey.

“We’re really trying to build a smaller community hospital and not a mini-academic medical center,” Brechbill said, adding that the new facility intends to operate on an “open staff” model in which physicians from Hershey as well as from other local health providers will have space to use at Hampden when needed.

The three-story, 300,000-square-foot facility is expected to open in the summer of 2021, according to Penn State, and will have 108 beds and numerous outpatient facilities.

The project is also a big step for Highmark, which announced last year a strategic partnership with Penn State Health that involves Highmark investing $1 billion into new Penn State Health facilities.

The effort will “transform where care is delivered and how it’s financed,” said Deborah Rice-Johnson, Highmark’s president. “Our goal is to make sure we’re providing value to our customers, patients and members.”

The Hampden Medical Center will give Highmark a facility only about 1,000 yards away from that of its rival, UPMC-Pinnacle’s West Shore Hospital.

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The start of the project comes a few weeks before the July 1 expiration of the consent decree between UPMC and Highmark, which was negotiated five years ago after and impasse between the two health care giants resulted in UPMC ceasing to accept Highmark-insured patients, causing Highmark to invest in its own infrastructure by buying Allegheny Health Network.

All of the parties involved are, legally, nonprofit corporations. State Attorney General Josh Shapiro has charged that, if the companies were to lock out each other’s customers once the consent decree expires, they would be violating their charitable mission and their nonprofit tax status.

Shapiro’s petition before the Commonwealth Court to modify the consent decree to ensure mutual access past July 1 is being challenged by UPMC.

But Rice-Johnson said the ongoing issues in western Pennsylvania won’t hit the Midstate. Highmark has existing rate and service contracts with West Shore Hospital that pre-empt UPMC’s buyout of Pinnacle in 2017

“With Pinnacle and Susquehanna and the other hospitals they’ve acquired in this region, we have a long-term contract, so the consent decree means nothing here,” Rice-Johnson said. “We’ll still have access. This isn’t about providing access; it’s about providing choice and affordable health care.”

The physical proximity of the new hospital to UPMC Pinnacle wasn’t a primary factor in the decision to build, said Penn State Health CEO Craig Hillemeier. The new site’s location and the rapid growth rate of the Cumberland County market spurred the decision, Hillemeier said.

“We don’t really think too much about what our competition is doing, we just want to do what’s right for Penn State Health,” Hillemeier said.

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