Penn Medicine to no longer receive $100 million

The University will no longer receive the $100 million in funding it was promised in a grant agreement announced last academic year.

The Philadelphia Inquirer reported Wednesday that Penn and the Philadelphia Health Care Trust had terminated the plan, which would have transferred the charity's assets to Penn Medicine, the governing body for the University's Health System, by 2009.

University Trustees Chairman James Riepe in a letter told trustees that the termination had been mutually agreed upon, the Inquirer reported. The grant had not yet received the necessary approval from the Philadelphia Orphans'Court or the state Attorney General's Office.

According to the agreement, which was announced in March, Penn Medicine would have received an increasing percentage of the trust's interest until 2009, when the PCHT would have transferred the remainder of its assets. Although the value of these assets has fluctuated, it was estimated at that time to be $100 million. The agreement also stipulated that PCHT Chairman Bernard Korman would become a member of the Penn Medicine board.

If awarded in full, the gift would have been the third largest in Penn's history and meant a significant financial boost to the University's once-ailing Health System. Although it has rebounded in recent years, it saw a $300 million loss in the late 1990s.

But over the last year the plan has faced criticism from community organizations, including the Philadelphia Unemployment Project and the Action Alliance of Senior Citizens of Greater Philadelphia. These groups claimed that the funds should be used to better serve low-income patients, especially the uninsured, instead of being given to Penn.

University officials could not be reached, and Penn Medicine public affairs representatives declined to comment on the termination of the agreement.

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