The financially-beleaguered Penn health system is about to receive a get-well shot in the arm: a $100 million donation that ranks among the largest gifts ever given to a university hospital, and the third largest in Penn history.
The gift comes from the Philadelphia Health Care Trust, in the form of income from its investments for the next seven years, followed by a transfer of all its remaining assets to Penn in 2009. The endowment will provide funds for education, research and patient care.
The Trust is a charitable foundation which makes grants to a number of Philadelphia-area hospitals and health care providers. It was created in 1996 from the proceeds of the sale of Graduate Hospital and its health system to the for-profit Allegheny health system, which subsequently sold its hospitals to Tenet Healthcare. Ironically, Graduate Hospital was once part of the Penn Health System before separating from Penn in 1977.
The four-hospital Penn Health System lost a total of $300 million in fiscal 1999 and 2000, which led Penn to consider selling the Health System. Instead, after earning a small $25 million profit in fiscal 2001, the University last year restructured its hospitals and medical school into Penn Medicine. Penn Medicine officials predict the current fiscal year, which ends June 30, will result in a slightly larger $35 million profit.
The Philadelphia Health Care Trust is headed by Bernard Korman, who received his undergraduate and law degrees at Penn. Korman became a member of the Penn Medicine Board of Directors last month, immediately becoming vice chairman and head of its finance committee.
See Tuesday's Daily Pennsylvanian for additional information about this major gift to Penn and its impact on the health system.
