Health Sys. to lay off a number of workers

A spokesperson said that the cuts would not affect the level of patient care. In an effort to balance its budget by Fiscal Year 2000, the University Health System will be forced to "eliminate some positions," according to Health System spokesperson Lori Doyle. Though a recent Philadelphia Inquirer report estimated that the Health System plans to lay off 180 to 360 of its approximately 18,000 workers by late June, Doyle said exact numbers would not be available for several weeks, when the budget is finalized at the end of next month. "We have an overall expense reduction plan in place to bring the Penn Health System back to the break-even point by the end of Fiscal Year 2000," Doyle said. "To do that, we need to cut $175 [million] to $180 million from the overall budget. And that will come from a combination of revenue enhancement and reduction." Doyle explained that the Health System intends to make program cuts as opposed to across-the-board workforce reductions, adding that retaining patient-care jobs is a top priority. "We're taking every measure possible not to eliminate positions tied directly to patient care," she said. "Our goal is to maintain positions in patient care." This past fiscal year -- which closed on June 30, 1998 -- the Health System incurred a $90 million budget deficit. Through the first six months of Fiscal Year 1999, there was a $33 million operating loss. Health System Chief Executive Officer William Kelley has pledged to bring the system to profitability by the end of the upcoming fiscal year. The financial hole forced a leading investment banking firm to lower the University's bond rating in April,Ea sign that the Health System's financial troubles could adversely affect the academic side of the University. The Health System's own bonds were downgraded last summer in the midst of an overall collapse of the regional health care market. Fifty-five percent of the total University budget is spent on the Health System, a $2 billion enterprise that controls roughly 20 percent of the Philadelphia health care market and includes four Penn-owned hospitals and 12 affiliates. But Doyle said Penn's financial difficulties are similar to those plaguing many of the nation's teaching hospitals, citing Harvard University-affiliated hospitals as an example. "If you look around the country, this is a very common problem at every teaching hospital," Doyle said. She noted that decreasing reimbursements, increasing denials by health maintenance organizations and increasing numbers of uninsured patients are key contributing factors to the Health System's woes. The decision to cut positions was not part of a mandate from Penn's administration, Doyle said. "This plan [of expense reduction] has been in place for several years and we've been anticipating this for several years now," she said. Doyle explained that other reduction methods like automating the pharmacy-dispensing process and redeploying hundreds of positions will continue to be incorporated as part of the overall budget goal.