Tough city market spurs Penn Health System expansion

Chicago, Ill. And by taking steps to increase its hospital alliances while simultaneously expanding its primary care physician base, Health System administrators have made it clear that they don't plan to slow down. The University recently completed a deal to bring Philadelphia's Holy Redeemer Hospital into the Health System, and Health System Senior Vice President William Foley explained that Penn is in the process of "finalizing an agreement" to incorporate the city's Pennsylvania Hospital into the system. When the deal is finalized, Pennsylvania Hospital will join the Hospital of the University of Pennsylvania and Presbyterian Hospital as the Health System's primary hospitals. The system is also affiliated with five regional hospitals and has educational relationships with several others. Additionally, dozens of primary care practices are joining the Health System as "clinical care associates" -- doctors who treat patients in area communities and then send them to one of the system's hospitals when they have serious problems. Both hospitals and independent practitioners have been forced to join large systems such as the University because of the increasing prevalence of managed care organizations, which prefer to deal with a small number of large institutions rather than many small ones. Penn's main competitors in the regional health care market -- Allegheny University and the Jefferson Health System --Eare also attempting to survive managed care by forging alliances and building a large network of affiliates. Allegheny has also announced plans recently to expand its already vast medical system. At a March press conference attended by Philadelphia Mayor Ed Rendell and Sen. Arlen Specter (R-Pa.), Allegheny's president released a plan to expand the school's medical facilities in Center City. The Allegheny plan calls for the construction of two new buildings --Eincluding an Ambulatory Care Facility with a state-of-the-art cancer center, and a power plant --Eat a total cost of approximately $100 million. The expansion is expected to employ over 400 construction and other full-time workers. But Penn Health System officials said they are not afraid of being left behind by the Allegheny expansion. "Allegheny is embarking on an effort to establish a caner center, and we have been a leader in cancer [research and treatment] for over 20 years," HUP Cancer Center Administrator Beverly Ginsburg said recently. HUP's Cancer Center has consistently received funding from the National Cancer Institute and is recognized as one of only 27 comprehensive cancer centers nationwide. Ginsburg added that the center is in the process of "doubling the clinical area for hematology-oncology services." Additionally, Penn announced plans recently to construct a $150 million medical research laboratory building -- referred to as Biomedical Research Building II -- by 1999. Health System spokesperson Rebecca Harmon described the project, which will provide space for the Cancer Center and other institutes, as the "largest construction project ever done at Penn." The building will be located next to the Clinical Research Building and Medical Center Parking Garage on Curie Boulevard.