Medical School faculty to Penn: Don't sell UPHS

A Trustees committee is debating the future of the Penn Health System. The Medical School faculty passed a unanimous resolution at their Faculty Senate meeting on Tuesday urging the University Trustees not to restructure the relationship between Penn and its Health System. Before the vote, Provost Robert Barchi -- the former chairman of the Neurology and Neuroscience Departments -- explained the work of a Trustees committee charged with making recommendations as to what should be done with the financially troubled Health System. The blue ribbon committee is made up of University and Health System Trustees, as well as top Penn administrators, including Barchi, University President Judith Rodin and William Kelley, who heads both the Health System and the Medical School. "One goal is to make the Health System the most nimble it can be in the marketplace," Barchi said. The committee is considering several alternative relationships between Penn and its Health System -- including dividing them into two corporations, which would both be owned by the University, Barchi confirmed yesterday. But the provost maintained that Penn will not sell UPHS, which has incurred losses of nearly $300 million in the past two years. Barchi assured the faculty members that the committee's plan was just in the discussion phase. He also promised that the University would consult the Medical School faculty more in the future. The Trustees are not scheduled to vote on the report at their meeting later this month, according to Barchi. "Part of the issue of what I was trying to do was to let them know what the Trustees were talking about," Barchi explained. "The concern from the faculty? was that something was being considered for implementation without consulting them." Faculty members fear that separating the Health System's finances from those of the Medical School would complicate research and teaching efforts by putting authority for financial decisions in two places rather than one. They point to the rise in levels of federal funding and academic prestige for the Medical School since its 1993 merger with the Hospital of the University of Pennsylvania first formed UPHS as evidence of the benefits of a continued close financial relationship. Since the merger, Kelley has led a rapid expansion which saw the purchase of three more hospitals and the creation of an extensive primary care network. All told, UPHS brings in about $1.9 billion in revenue a year and controls 19 percent of the competitive Philadelphia health care market. Medical School Faculty Senate President Howard Herman called the specially convened meeting after faculty members expressed their concerns that they were not being kept informed by University officials about the future of the UPHS. "This was the first time that the faculty? has heard this," a source on the Medical School faculty said. "The bottom line was to inform [the faculty] that this was the thought [of the committee]." "We had heard that the proposal was to split off the hospitals? as one corporation and have the Medical School remain affiliated with the University," said Stephen Emerson, chief of Hematology and Oncology at the Hospital of the University of Pennsylvania. But he explained that the rumors were neither confirmed nor denied by administrators. "We didn't support the notion. We didn't think it was a good idea," Emerson added. Executive Vice President John Fry -- who sits on the Trustees committee and has spent much of his time over the past year working on the Health System crisis -- explained that any plan that is decided upon would have to meet certain criteria. It would first have to create "more financial protection" for the University, Fry said, but would also need to promote "what's right academically" for the Medical School. "The fundamental concern is being able to provide an integrated approach to academic medicine," the faculty source said. "There was a real concern that the structure would create an impediment to that." Many faculty members heard the word "separation," and they thought it meant completely divesting the University of the Health System, Barchi explained. At the last gathering of Penn's Trustees in October, Kelley announced that UPHS would eliminate 1,700 positions over the next six months to complete a 20 percent workforce reduction. UPHS had cut 450 employees and eliminated 1,110 employees in late May.