Medical Center projects positive bottom line despite economy

June 19, 2008

University Park, Pa. — The Penn State Milton S. Hershey Medical Center will post a positive financial margin and is expected to finish near its annual budget target when the current fiscal year closes June 30, despite a tightening economy, Harold L. Paz, chief executive officer of Penn State Milton S. Hershey Medical Center, Penn State’s senior vice president for health affairs, and dean of Penn State College of Medicine, announced Thursday (June 19). Paz made the announcement at the annual public meeting of the Medical Center's board of directors, where he also shared that the organization's research funding is trending ahead of last year's figures through the first 11 months of the current year.

The Medical Center projects a 5 percent positive operating margin, below the 5.6 percent operating margin budgeted for the fiscal year ending June 30. The total margin for the year, which takes into account the cost of financial support for Penn State College of Medicine, is 2.2 percent and slightly less than the 2.6 percent total margin budgeted for the year. Net income for the year is $19.4 million, which will be used to invest in facilities, equipment and staff necessary to advance the organization's educational, research, patient care and community outreach missions.

"Because of the commitment and effort of our excellent people and through the support of our community, our academic medical center is meeting the majority of its goals in the face of some significant challenges," said Paz. "Our excellent doctors, nurses and care providers continue to deliver superlative patient care, which has earned significant recognition from organizations as diverse as U.S. News & World Report, The American Nurses Credentialing Center (ANCC) and the Joint Commission. Our researchers have written more grant proposals and secured more research support than last year despite increased competition for limited National Institutes of Health (NIH) funding. At a time when our nation and our Commonwealth need more doctors, we have produced the second-largest graduating class in our history, and many of our medical students are choosing to stay in Pennsylvania and at Penn State Hershey Medical Center to complete their medical residencies."

Patient care

In August, the Medical Center joined the elite ranks of health-care facilities that have earned Magnet recognition from the ANCC for excellence in nursing practice and patient care. In May, Penn State Hershey Heart and Vascular Institute's ventricular assist device (VAD) program became one of only a handful of programs nationwide to earn the Joint Commission’s Gold Seal of Approval for implanting VAD's as destination therapy for patients with advanced heart failure. Then in June, Penn State Hershey Children's Hospital was ranked among the Best Children's Hospitals in the nation by U.S. News & World Report.

Total clinical activity at the Medical Center and its outpatient sites continues to increase despite a challenging economy, further emphasizing the need for expanded facilities and services. With less than two weeks remaining in the current fiscal year, the Medical Center is projecting more than 822,815 outpatient visits for the year, which represents a 4.4 percent increase over past year volumes. Emergency department patient visits are expected to be 50,403, a 6.9 percent increase, while total surgical cases are projected at 23,624, a 2.3 percent increase. Hospital admissions are expected to be 26,853, which is 2.8 percent lower than last year.

Meanwhile the Medical Center witnessed a significant increase in both charity care and bad debt, due to a larger number of indigent, uninsured and under-insured patients. The Medical Center's charity care figures for the year are expected to reach $17.4 million by July 1, up 18.4 percent from $14.7 million in charity care a year ago.

Research

Through May, the Medical Center and College of Medicine has received $82.5 million in research funding awards, slightly higher than the $79.3 million received through the first 11 months of the previous year. More than half of this year's grant awards to date (nearly $43 million) came from the NIH. Likewise grant applications and dollars requested through the first 11 months of the year are ahead of those from 2006-07, which provides a promising forecast for next year's research funding potential. Medical Center and College of Medicine researchers have filed 928 grant proposals through May, slightly ahead of last year's 924 proposals.

Education

In May, the College of Medicine held its 38th annual commencement, conferring degrees upon 125 medical students and 40 graduate students. The 165 total graduates comprise the second largest-ever graduating class in the college's history.

Of the college's graduating medical students, 14 percent are staying at Penn State Hershey Medical Center to complete medical residency training, 28 percent will remain in Pennsylvania for their residencies, and 51 percent chose to enter primary care residency programs. In July, the Medical Center will welcome 156 new residents and fellows bringing the total number of medical residents and fellows to 523. Both numbers represent all-time highs.

In addition, the college has experienced a 4 percent growth in student applications over the past year. The nearly 7,100 applications exceed the more than 6,800 received the prior year. Meanwhile, the quality of applicants remains strong. The 148 medical students beginning their studies at Penn State College of Medicine in August have an average grade point average (GPA) of 3.67 and an average Medical College Admission Test (MCAT) score of 9.76.

(Media Contacts)

Last Updated March 19, 2009