Doctors mull future plans for Health System

Now that the Health System will stay within Penn's administrative umbrella, many doctors are breathing a collective sigh of relief. Last Friday, University President Judith Rodin announced the intention of the Board of Trustees to spin off the $1.9 billion Health System into its own non-profit corporation owned by the University. The decision came after months of speculation on the future of the Health System, which posted losses of more than $300 million over the past three years. Possible options included a partial or total sale of the Health System's assets. "There was not much enthusiasm for a joint venture with a for-profit entity," said Arthur Asbury, interim dean of the School of Medicine. In a way, the Health System physicians got their wish -- Penn is no longer up for grabs. But some doctors say the current plan is not so different from a plan last year that met opposition from some Medical School faculty. Last February, a "blue ribbon committee" of University Trustees and top Penn administrators -- including Rodin, Provost Robert Barchi and then-HealthSystem CEO William Kelley -- was considering a proposal to separate the Health System from the University. "The proposal was to split off the hospitals... as one corporation and have the Medical School remain affiliated with the University," Stephen Emerson, chief of Hematology and Oncology at the Hospital of the University of Pennsylvania, said at the time. "We didn't support the notion." The proposal would have allowed the University to retain ultimate control over the Health System, but that plan was never carried into effect. In some ways, however, Penn's recent actions bear resemblance to the plan that was abandoned a year ago. A doctor with the Health System, who wished to remain anonymous, said that the plan voted down last year was the "exact same option" announced by Rodin last week. According to Rodin, the work of last year's committee "factored into the final deliberations" of the special committee which endorsed the current plan. Rodin attributed the faculty's change of mind to a change in the times. "I think the sense of being excluded contributed to the [original] reaction," Rodin said, pointing to the inclusion of faculty members on the special committee as a solution to that problem. She added that the absence of Kelley -- who spearheaded the creation of the Health System in the mid-1990s -- may have factored into the change in the faculty's attitude, as well. Both Rodin and Asbury described the faculty's attitude to the current plan as positive. "I'm sure what we heard was a deep sigh of relief," Rodin said. Asbury concurred. "Their reaction has been quite favorable," he said, explaining that the "overwhelming feeling was basically relief that the decisions" were to not sell. In the past, faculty members feared that separating the Health System's finances from those of the Medical School would complicate research and teaching efforts. While the administration is enthusiastic about the new direction for the HealthSystem, some doctors are approaching the decision with caution. "It's better than a sale to a for-profit," a HUP physician said, adding, however, that "the best would have been a continuation of the status quo." "It would be a disaster if it was a for-profit institution," he said before last week's decision was reached. "It would mean the demise of the academic center as we know it." The physician, who asked to remain anonymous, questioned the special committee's representation of the medical faculty. "One could question how much input that task force had," the physician said. "It was short-tracked. In the end, it limited the amount of input." Bernard Bloom, a Wharton professor of health care management, concurred. "I don't think [the committee's proceedings were] transparent enough for the Penn community to examine what has been going on," Bloom said.