Health System Agenda for Recovery

Recently, I accepted the top leadership position in the Health System because the past eight years of my professional life at this fine institution have reinforced for me that Penn is--and will continue to be--one of the greatest academic medical centers in the world. I pledge that one of the guiding principles of my administration will be that strategic decisions and actions will emanate from a meaningful combination of knowledge, honesty, resolve, and respect--for our patients and for each other.

As you know, we are now at an important point in our history in which every move we make will affect our ability to successfully overcome past challenges as well as successfully position us for the future. I say "us" because, quite simply, we're in this together. From my first day as your

Interim CEO and Dean, I have sought advice about how best to secure our future from a wide variety of people--including University President Dr. Judith Rodin, UPHS and University Trustees, UPHS senior leadership and faculty colleagues, nurses, technicians, secretaries and patients. Those conversations have helped shape my own thoughts about our continuing efforts to restore financial stability to our system and to maintain our well-earned reputation for excellence in patient care, medical education and research. Thus, at this time, I'd like to share with you my initial ideas and address some of the specific issues I know are on people's minds.

Focus on the Fundamentals of Patient Care

First, we must get back to basics. The care of individuals with illness and the preservation of health in all individuals are at the core of all our endeavors. We will care for our patients with respect and compassion in a setting where patients benefit from the latest medical advances that are delivered with skill, integrity, and efficiency. Our facilities must be clean, safe, and pleasant to present the best environment for high quality care. While our physicians, nurses, and other direct care-givers provide the most cost-effective quality treatment possible, we must continue our efforts to ensure that we are paid for the services we provide. This means we will continue to push aggressively for payments due us from all income sources.

Financial Recovery: "Mission Critical"

Our long-term success is dependent on the results of our financial recovery plan. The good news is that we have shown some positive gains in the first eight months of FY2000. However, we can ... and must .. continue to find additional ways to enhance revenues and be more cost effective. Cost effectiveness does not mean reductions in personnel needed to do the same work, but rather gaining better performance with the same resources. To meet our fiscal goals for FY2000 and beyond, we've initiated several key programs--including the redesign of our billing systems so that all relevant charges are captured quickly and accurately, improved clinical resource management by physicians and allied-health professionals to reduce unnecessary expenses, and program reductions in select areas.

Strategic Planning is Important for Long-Term Financial Health

In the 1990s our health system embarked on a strategy to provide vertically integrated care (comprehensive services) for patients across the greater Philadelphia region. Part of the rationale for this strategy was to prepare to take full financial risk for the care of a large population. This type of reimbursement for health care has not developed to the extent anticipated, although it was predicted by experts across the nation. Therefore, we must revise our notion of the organization and operation of our health system based on the Philadelphia market place and the unique cultures in our hospitals and practices. We must focus on core businesses at the medical center (HUP and PMC) and enhance programs that add value to the region's health care. Additionally, we must ensure that Pennsylvania and Phoenixville hospitals are successful in their communities and that CCA and satellite practices provide high quality care and are financially sound. A group of key advisors and stakeholders is working with me in a comprehensive strategic planning process to help develop a detailed plan for achieving these goals in the shortest possible time. While it would be premature to speculate on what changes may be implemented, all operationally feasible options are being put on the table for review and discussion. As you know, we have concluded our arrangement with the Hunter Group, which was retained last month to help us during that transitional period. Their advice was valuable and welcomed ... however, from this point forward, the Health System leadership team will be responsible for making the final strategic decisions that will be presented to the Trustees of the Health System and University for their approval.

At the Center of the Health System is a Great Medical School

Renewal of the medical profession and health care innovation is dependent on the education and research programs of our School of Medicine. The research programs of the School have grown faster than any in the nation over the past decade and, consequently, Penn is ranked second in the nation in research funding from the National Institutes of Health. Our education program, students and trainees are superb. In fact, US News and World Report ranks our school third in the nation. This extraordinary growth in research and education was fueled by profits from our health care programs. The financial challenges of the Health System will result in less money for funding School of Medicine programs. However, decreased growth was inevitable even without financial deficits in the Health System. The dramatic growth in faculty and programs over the past decade necessitates a period of nurturing and development leading to enhanced excellence of each investigator and teacher. We will continue to support our research programs to improve the impact and importance of our research discoveries. Additionally, we will support our education programs to provide our students and trainees with the tools necessary to be future leaders.

Strength of Spirit

We have many tremendous assets--but none more valuable than the people who make up our Health System and School of Medicine. Having worked with you, individually and collectively, for nearly a decade--I know you to be talented, competent, resourceful, creative, loyal, and empathetic. Those traits have been sorely tested of late. We must continue to draw upon our inner strength and resolve to see us through the next few phases of our sometimes-tumultuous turnaround.

Because of you, I am proud to be leading our efforts at this time, and I remain proud by what I see everyday as I visit physicians' offices and patient-care floors and find that we have remained dedicated to our primary mission--the exquisite care and comfort of those who rely on us the most--our patients. In time, I trust the efforts of my leadership team can help renew or re-charge your own sense of pride that comes from working at Penn.

In the meantime, thank you for doing your jobs so well during these difficult times. I know I can count on your support as we improve our financial and organizational base so that we remain one of the most prestigious and respected academic medical centers in the nation.

--Peter G. Traber, CEO, UPHS and Interim Dean, School of Medicine


Almanac, Vol. 46, No. 28, April 11, 2000

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