Five hospitals join UPHS

One of Philadelphia's largest medical systems just got a little bigger, as the University of Pennsylvania Health System announced an affiliation yesterday with the five local branches of the country's largest Catholic health system. UPHS, created five years ago, is one of the country's leading academic health systems, currently controlling roughly 20 percent of the region's patient volume. The system has annual revenues of almost $2 billion. The Denver-based Catholic Health Initiative, which has more than 100 health-care affiliates in 22 states, has annual revenues of more than $5 billion. The five hospitals join UPHS's four wholly-owned hospitals -- Hospital of the University of Pennsylvania, Presbyterian Medical Center, Phoenixville Hospital and Pennsylvania Hospital -- and seven other affiliates to form a network of 16 hospitals in nine counties in Pennsylvania and New Jersey. "This takes us a substantial way to completing our network," Penn Senior Vice President for Network Programs John Kepner said. He added that UPHS is also looking into affiliations with several unspecified New Jersey facilities. Under the agreement, each system will still retain its independent identity, but the two will cooperate to provide a broad range of services from primary care to particular specialties. In a memo sent out to faculty and staff yesterday, William Kelley, chief executive officer of the Health System and dean of the Medical School, said the new relationships -- in areas such as cancer care and disease management -- "will offer an expanded level of care to many communities and will enable our health systems to contract with insurers over a large geographic range." He added that the two groups hope to collaborate on national and regional levels, in addition to the local association that is common in all single-hospital affiliations. Kepner said the affiliation brings "a tremendous amount of potential" for joint programs. In addition, this affiliation is different from one with a single hospital, he said. On the national level, CHI and UPHS both share the priority of developing so-called "disease management" systems in which a patient with certain symptoms is treated in a certain way. Also, he said, CHI is a "national organization with substantial resources and clout in its own right." Additionally, the health system's affiliation with five hospitals provides a greater opportunity for regional programming in specific areas like cardiology, cancer care and geriatrics, which Kepner said are high on the agenda. William Foley, who was UPHS's senior vice president for hospital operations before joining CHI in 1997 and is now group president of CHI, also expressed his interest to work together with UPHS in joint programs and to "offer new or expanded clinical services in many communities. The newly affiliated hospitals are CHI's five Pennsylvania facilities: St. Agnes Medical Center and Nazareth Hospital in Philadelphia; St. Mary Medical Center in Langhorne; St. Joseph Hospital in Lancaster; and St. Joseph Medical Center in Reading. They had combined 1997 operating revenues of almost $400 million. More than 100 physicians that are part of Franciscan Family Care, CHI's primary care network, will also participate in the affiliation, joining UPHS's network of 500 physicians. With the Allegheny health system's collapse this summer, UPHS and the Jefferson Health System remain the two largest health care systems in the region, with Temple University as a distant third.