Medical Center posts solid year despite challenges

September 08, 2011

Penn State Hershey Medical Center continued its growth in patient volumes and experienced solid financial performance last year in the face of a rapidly changing health care environment and an expanding population of patients with little or no insurance, according to Harold L. Paz, Medical Center CEO, Penn State’s senior vice president for health affairs, and dean, Penn State College of Medicine. Paz reported to faculty, staff and members of the media at the annual public Board of Directors meeting on Sept. 7 that the Medical Center achieved a 7.68 percent operating margin against a budgeted margin of 4.4 percent despite a significant, 52-percent increase in charity care and unpaid patient medical bills. The Medical Center’s operating margin for the year was $89.9 million of which $50.4 million supports operations of Penn State College of Medicine, for a total margin of $35.5 million, or 3.03 percent.

Outpatient visits increased by 3.3 percent from the previous year to more than 854,000. Surgical cases were more than 27,000, up 5.1 percent, and overall hospital admissions were at 26,900, up 1.3 percent from the previous year. Emergency Department visits increased by 7.2 percent to more than 61,000 this year compared to last, a continuing trend due in large part to the 2009 redesign of the department to increase throughput and patient satisfaction while reducing wait times.

“As the region’s only academic medical center, Penn State Hershey continued on a path of growing strategically to meet the region's health care needs, both by providing patient care and by training new health care professionals, while at the same time working in partnership with other health systems and community hospitals where possible,” Paz said.

The Medical Center started the fiscal year with an expanded presence in central Pennsylvania communities, with new Medical Group practices in Camp Hill, State College and Reading, the latter of which was opened in collaboration with Berks County-based St. Joseph Medical Center. In March, the opening of the Penn State Hershey Children's Hospital-Lancaster Outpatient site consolidated and expanded pediatric services available to families in Lancaster County.

In concert with the expansion of clinical sites in State College, Pa., the Medical Center continued development of the University Park Regional Campus of Penn State College of Medicine. The regional campus is a collaboration with Mount Nittany Medical Center to train the next generation of health professionals in the State College area.

Paz reported that while admissions and visits steadily increased, so too did the amount of uncompensated and undercompensated care to a growing number of people with little or no medical coverage. The Medical Center provided $35.4 million in charity care for the year, an increase of more than 7.5 percent over the previous year, while bad debt (the amount of patient medical bills that go unpaid) more than doubled, from $24.9 million in fiscal year 2010 to $52.5 million, a 111 percent increase.

Children’s Hospital
In May, the Children's Hospital was recognized among the best in the nation in two specialties on the U.S. News and World Report's annual ranking of children's hospitals, ranking 44th in urology and 50th in orthopedics.

Year-end also saw exciting progress on campus construction, with the new home of Penn State Hershey Children's Hospital more than halfway complete and set for a late-2012 opening. A new Support Services Building on the west side of campus is nearly complete and is set to open in November.

As the fiscal year came to a close in June, the National Institutes of Health (NIH) awarded Penn State, the Medical Center, and College of Medicine a five-year, $27.3 million Clinical and Translational Science Award (CTSA) grant to speed the advancement of promising scientific discoveries into treatments to improve the public health, making Penn State one of only 60 to earn the prestigious award. The award capped off a record year for research funding, as College of Medicine investigators received a $105.4 million in external support, including $66.1 million from NIH.

Health System
Also in June, Penn State alumna Robin D. Wittenstein was named director and chief operating officer of Penn State Hershey Health System. The former acting president and chief executive officer of the University Hospital, University of Medicine and Dentistry of New Jersey, will oversee Penn State Hershey's growing network of more than a dozen clinical and academic affiliate hospitals across the region and the Health System's interests in health-related ventures such as Pennsylvania Psychiatric Institute and Penn State Hershey Rehabilitation Hospital.

Paz also reported that the College of Medicine continues to be a top pick among the nation's students seeking entry to medical and graduate school, and that its students remain competitive among their peers.

Nearly one in six students who apply to medical school applies to Penn State, with more than 7,300 applications for 145 slots. Prospective College of Medicine graduates continue to outperform national peers: 92 percent of students pass on their first attempt of the Step One of the United States Medical Licensure Exam (USMLE), better than the national average of 91 percent.

In May, the College of Medicine graduated its 41st class and awarded 151 medical degrees, 15 master of science degrees, 16 master of homeland security degrees, 29 doctorates, and four joint medical doctor/doctorate. degrees. Of the medical class of 2011, 37 percent entered residency in primary care fields -- family medicine, pediatrics, obstetrics/gynecology and internal medicine -- and 38 percent stayed in Pennsylvania.

(Media Contacts)

Last Updated September 09, 2011