Mercy, West Penn form new network. (Pittsburgh Mercy Health System Inc.; Western Pennsylvania Healthcare System; Community Health Partners)

Hospital, physician alliance takes new managed care route

DOWNTOWN - And then there were three.

In the continuing chess game for local health care dominance, two of the region's large hospital systems have made their move, creating a third hospital network.

To build Community Health Partners, Pittsburgh Mercy Health System and the Western Pennsylvania Healthcare System have taken 150 primary care physicians as partners in a for-profit, physician-run health care system.

The approach is radically different than that taken by the region's two other hospital networks, anchored respectively by the competing University of Pittsburgh Medical Center and Allegheny General Hospital.

And while many health care experts have predicted the emergence of a third local hospital network, most expected it would be created by an out-of-town company - not two hospitals such as Mercy and West Penn, which had been seen primarily as merger/acquisition targets for the bigger fish.

"It seems very unique," said Jane Sarra, a principal with …