A troubled Pittsburgh healthcare system is expected to announce as soon as Wednesday that it has reached a deal to avoid a $1.6 billion bankruptcy, which would cut its debt and leave its assets in the hands of insurer Highmark Inc, according to a source familiar with the matter. Under the tentative agreement, Highmark would offer cash payments of about 87.5 cents on the dollar, plus accrued interest, to West Penn Allegheny Health System's bond holders, the source said. The system has about $710 million of outstanding debt, which was issued in 2007.