Paz tells trustees collaboration key to Penn State Hershey's growth

HERSHEY, Pa. -- In an environment offering challenges that include health care reform, declining health care reimbursement, growing ranks of uninsured patients, and uncertainty around government funding for health sciences education and biomedical research, Harold Paz told University Trustees that the key to success for Penn State Milton S. Hershey Medical Center is building relationships with new partners and even old competitors.

During his annual Medical Center and Penn State College of Medicine address on Friday (March 16), Paz, who serves as the Medical Center's chief executive officer, Penn State's senior vice president for health affairs and dean of College of Medicine, said Penn State Hershey has forged various partnerships with nearly every hospital in central Pennsylvania over the past six years.

Paz told trustees that collaboration with hospitals, health systems and other providers has not only helped the Medical Center's bottom line but has enabled Penn State Hershey to effectively advance its missions of education, research, patient care and community service, while complementing the care offered by many of the region's community health providers. He said it also has helped keep patients and families in need of vital specialty and subspecialty services from having to leave the region for their care.

"As central Pennsylvania's only academic medical center we have a responsibility to serve our community by producing the next generation of health care professionals and biomedical scientists, discovering new medical knowledge that will improve health, and providing state-of-the-art care for serious or life-threatening conditions," said Paz. "In many cases, the most effective way to advance those missions is to collaborate with community hospitals and regional health systems, including those with which we sometimes compete."

The Medical Center has grown significantly since the start of Paz's tenure in April 2006. More than 1.5 million square feet of facilities have been added to its Hershey campus, including a 175,000-square-foot home for Penn State Hershey Cancer Institute and the new free-standing Penn State Hershey Children's Hospital, which is set to open in November.

The organization also formed the Penn State Hershey Medical Group, a multi-specialty practice that now includes more than 900 employed physicians and clinical providers. The medical group has added many new medical clinics in the last five years -- three in State College alone -- to bring its total number of practice sites to 58 across central Pennsylvania.

In part, the facilities expansion comes in response to substantial clinical growth over the past six years. Paz reported significant increases in hospital admissions (up 10 percent), surgical cases (up 23 percent), emergency department visits (up 27 percent) and outpatient visits (up 16 percent). Buoyed by the increased volumes, he stated that Medical Center revenues have consistently stayed ahead of expenses over the past six years.

Meanwhile extramural research funding has increased steadily from $95 million in 2006 to more than $105 million last year. In 2011, the Medical Center and College of Medicine secured a five-year $27.3 million Clinical and Translational Science Award on behalf of Penn State from the National Institutes of Health (NIH) to accelerate the translation of scientific discovery into methods for improving public health.

With the substantial growth Penn State Hershey has experienced and the changes brought on by health care reform, simply expanding facilities is not enough, Paz told Trustees. He said Penn State Hershey needs to find a broader clinical platform to support and successfully integrate all of its core missions and that work on such a platform is well under way.

Penn State Hershey Health System was established in 2008 to enable the creation of joint ventures and hospital affiliations with local health systems and other providers.

The Health System now includes a joint venture partnership with Select Medical, which built and operates the free-standing Penn State Hershey Rehabilitation Hospital, an acute care hospital located one mile from the Medical Center's Hershey campus. The 54-bed facility, completed in 2010, has 44 beds dedicated to the care of adults and 10 inpatient beds for pediatric rehab patients to complement the care provided by Penn State Hershey Children's Hospital. The hospital also serves as the operational home for the new Department of Physical Medicine and Rehabilitation, also established in 2010.

Another Health System collaboration is the Pennsylvania Psychiatric Institute (PPI) with Harrisburg-based PinnacleHealth. PPI provides inpatient and outpatient behavioral health and includes a 74-bed hospital with specific units for pediatric, adult and geriatric patients.

"These partnerships enabled us to create state-of-the-art facilities to deliver specialized care and meet vital health needs within our community," said Paz. "But they also provide unique opportunities to train future health care professionals and study novel approaches to diagnosing, treating and preventing illness and injury."

Among the most significant developments Paz shared with trustees is the growth in the number of hospital affiliations the Health System has established. While some are limited to academic relationships involving medical education and research, others are far more comprehensive and focused on having Penn State Hershey physicians provide cutting-edge specialty care to patients at local community hospitals. The number of affiliates has more than doubled since 2006, going from eight to 17.

The most recent inter-hospital relationship, announced on March 6, involves Carlisle Regional Medical Center collaborating with Penn State Hershey Cancer Institute to provide patients with greater access to comprehensive oncology services and clinical trials close to their homes.

Paz also shared with trustees that the Health System has developed a new telemedicine program and expects to announce the first set of partner hospitals in a few weeks.

"In the 21st century there are many ways to partner," said Paz. "The method may vary, be it a physical building, placing clinical providers at a partner hospital, or using technology to create real time consults among physicians and clinical staff at multiple locations."

What is certain, according to Paz, is that the health care environment is changing rapidly and significantly. Many hospitals are rushing to keep up or catch up. A great deal of progress has been made over the past few years in advancing Penn State Hershey's fully integrated health care system across the region, Paz told trustees. He said the goal has been to position Penn State Hershey for the enormous changes facing health care in the years to come.

"We are well-positioned for the future, whether it includes pay-for-performance models, accountable care organizations, bundled payments or all of the above." said Paz. "We have a competitive advantage in that we already employ all of our physicians. We own and operate our Medical Group practices. We have a breadth of clinical services complemented by strong research and education programs. We have many of the key pieces already in place and we have every intention of staying ahead of the curve."

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Last Updated March 22, 2012