Hopefully, an end to job cuts

The Health System has announced another round of job cuts - but must move cautiously in doing so. The measure seems a necessary, if painful, step along the road to financial recovery for a system that posted a $198 million deficit for the most recent fiscal year. To be sure, the latest round of cuts will require administrators, for the first time, to cut back on the number of people directly involved in patient care without affecting the quality of that care. But Chief Executive Officer William Kelley has previously articulated his belief that the Health System can reduce the types of care provided, leaving the number of providers in continued areas of care largely unaffected. Such an approach seems promising, though we strongly urge Penn to find positions in other parts of the University for as many terminated employees as possible. Of greater concern is the long-term effect of the cuts on the Health System's relationship with the University. Put simply, the belt-tightening that UPHS is going through is more than a reaction to an economic downturn. The business of health care is in the process of changing. Kelley is the first to acknowledge that the need to cut spending will hamper UPHS's efforts to remain a leader in developing new treatments and technologies. And, as fiscal pressures continue to build on academic health systems nationwide, more than a few experts have expressed concerns about the future viability of "teaching hospitals." This is not to say that divesting the Health System makes sense now or ever will. There is no doubt that the system affords substantial benefits -- teaching resources, research opportunities and facilities -- to the University even as it is losing money. But Penn is an educational institution, not a health care provider. As the nature of academic health systems continues to change, the balance between the benefits of having such a system and the increasing costs must be watched carefully.