One system, under Penn, indivisible

The Health System will be neither dismantled nor sold, President Judith Rodin announced Friday after meeting with the Trustees.

The steps the University is taking will allow the Health System to respond more quickly in the volatile health care marketplace while maintaining the Health System’s missions of teaching, research and patient care.

The Health System will become a new, nonprofit entity wholly owned by the University but with its own chief executive officer and governing board. “The University is seeking a more nimble, flexible institution,” Rodin said. The current structure, which requires four formal approvals for each budgetary decision, slows the Health System down.

For the first time since the Health System was created, the position of Health System CEO will be separate from the position of Medical School dean and executive vice president of the University. Rodin said she expected there to be a “bridge” between the Health System CEO and the Medical School dean/EVP.

She also stated that the University intends to keep the current management in place, but added that the special medical faculty-trustee committee that examined the future of the Health System had not thought about personnel.

Under the current structure, the Health System has turned around its finances and has begun paying down its multimillion dollar debt. “The debt will not grow larger,” Rodin said. The financial turnaround enabled the plan for the Health System as a separate nonprofit. The new nonprofit 501(c)3 will not insulate the University from the debt but will allow restructuring of that debt, Rodin said.

Praising the special committee’s work, she said that all of the options the committee examined had ardent supporters and detractors. “Everyone has shifted positions at least 180 degrees at least twice,” Rodin said. “We considered every option.”

Rodin emphasized that the committee’s recommendation has not yet come to a formal vote. “The Trustees did not vote on a resolution. What they did do is endorse a direction.” Rodin estimated the changes would take nine to 12 months to put into effect and would require “significant regulatory approval.”


Originally published on March 1, 2001