Medical Center marks a year of substantial growth

September 16, 2010

During a year of significant expansion and propelled by growth in outpatient visits, surgical cases and emergency department patients, Penn State Milton S. Hershey Medical Center exceeded its budgeted operating margin for the year, according to Harold L. Paz, Medical Center CEO, Penn State’s senior vice president for health affairs, and dean of Penn State College of Medicine.

Paz reported to faculty, staff and members of the media at yesterday's (Sept. 15) annual public Board of Director’s presentation that the Medical Center achieved a 5.4 percent operating margin against a budgeted operating margin of 4 percent despite a still sluggish economy that saw the Medical Center’s charity care increase by more than $11 million over the prior year. The Medical Center’s operating margin for the year was just over $55 million, with nearly $34 million going to support operations of Penn State College of Medicine.

The Medical Center began Fiscal Year 2009-10 with the opening of the new Penn State Hershey Cancer Institute building and finished with the opening of new Penn State Hershey Medical Group practices in Camp Hill, State College and Reading. The latter was opened in collaboration with Berks County-based St. Joseph Medical Center.

In June, the new 54-bed Penn State Hershey Rehabilitation Hospital, developed in partnership with Select Medical Corporation, opened just one mile from the Medical Center campus in Hershey. In November 2009, the Medical Center broke ground on the long-awaited Penn State Hershey Children’s Hospital, which is scheduled to open in the fall of 2012.

“Our Medical Center continues on a path of strategically-planned growth, and we remain focused on meeting the needs of patients across central Pennsylvania,” said Paz. “We believe that no patient, no family, should have to leave the region to receive state-of-the-art specialty care. Over the past year, we have made important strides in our effort to expand services in areas such as cancer, acute care rehabilitation and pediatrics. Wherever possible we have done so in collaboration with other health care providers rather than in competition with them.”

Outpatient visits increased to more than 854,000 in fiscal year 2009-10, up more than 4 percent over the previous year. Surgical cases for the year were nearly 26,000, up more than 2 percent from last year. Hospital admissions fell slightly. At approximately 26,500 admissions, the total was down less than 1 percent. Emergency department visits jumped more than 9 percent to nearly 57,000. The increase is due in large part to a 2009 redesign of the Medical Center’s emergency department, which increased throughput and patient satisfaction scores while decreasing average wait times.

Uncompensated and under compensated care continues to grow, a likely by-product of a still recovering economy and higher unemployment. Charity care for the year finished at nearly $33 million dollars, while bad debt (the amount of medical bills that go unpaid) was nearly $25 million. Collectively, the $58 million total is nearly $13 million higher than last year’s total.


The Medical Center and Penn State College of Medicine experienced growth in overall research funding over the past year going from $98.4 million in 2008-09 to $100.24 million in 2009-10. Federal funding from the National Institutes of Health (NIH) grew from just over $59 million to nearly $71 million over the same period.


Paz also reported that Penn State College of Medicine remains a medical school of choice for aspiring physicians and scientists. Applications to the medical school class of 2014 were up 7 percent over the previous year. Nearly one in five applicants to U.S. medical schools applies to Penn State College of Medicine, with more than 7,600 applications for 145 medical student seats in the entering class.

Paz also stated that prospective College of Medicine graduates are outperforming national benchmarks. College of Medicine students boast a 97 percent pass rate on Step One of the United States Medical Licensure Exam (USMLE), better than the national mean of 93 percent. Step Two USMLE pass rates among College of Medicine students were 100 percent against a national mean of 97 percent.

“Our fundamental responsibility as a medical school is to prepare our students to become the best physicians and scientists they can be,” said Paz. “I’m pleased to report that all the evidence over the past year suggests we are meeting that obligation.”

In May, the College of Medicine awarded 148 medical students their doctorates of medicine (M.D.) degrees with 75 graduate students earning master’s degrees or doctorate. In June, the College earned full re-accreditation (for an eight-year term) from the Liaison Committee for Medical Education (LCME). The LCME cited a culture of collegiality and collaboration, outstanding leadership, unified governance, use of technology and excellent faculty development programs as strengths of Penn State College of Medicine in its final accreditation report.

Founded in 1963 through a gift from The Milton S. Hershey Foundation, Penn State Milton S. Hershey Medical Center is one of the leading teaching and research hospitals in the country. The 484-bed Medical Center is a provider of high-level, patient-focused medical care. Annually the Medical Center admits nearly 27,000 patients, accepts more than 850,000 outpatient visits, receives nearly 57,000 emergency room patients and performs nearly 26,000 surgical procedures. The Medical Center campus includes Penn State College of Medicine (Penn State’s medical school), Penn State Hershey Cancer Institute, and Penn State Hershey Children’s Hospital—the region’s only children’s hospital. The Medical Center campus is part of Penn State Hershey Health System, which also includes the Pennsylvania Psychiatric Institute, Penn State Hershey Rehabilitation Hospital, and other specialty facilities. On the Web at

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Last Updated September 16, 2010