Medical Center reports historic year of significant growth

June 23, 2004

Kirch informs Board of Directors of success in research, education and patient care missions

Hershey, Pa. -- Following a year in which Penn State Milton S. Hershey Medical Center made international headlines for its excellent provision of care to several newsworthy patients, the CEO of Penn State Milton S. Hershey Medical Center Tuesday (June 22) told the Medical Center's Board of Directors that the organization itself is in improving financial health.

During the annual public meeting of the Board of Directors, Darrell G. Kirch, senior vice president for health affairs, dean of Penn State College of Medicine and chief executive officer of the Medical Center informed the board that the medical center is poised to meet its budget for the fourth consecutive year. Kirch also told the board that the medical center and Penn State College of Medicine enterprise saw continued growth in its funded research over the past year.

In recent months, Penn State Hershey Medical Center garnered worldwide attention as medical center care teams successfully managed the delivery and care of sextuplets and quadruplets over a two-week period, as well as the ongoing care of a York County man kept alive for more than a year by an experimental heart device that was conceived and developed by Penn State College of Medicine researchers in partnership with Arrow International of Reading. Kirch highlighted these success stories at the Board of Directors public meeting as he unveiled details of the organization's fiscal health.

"This year has been one of tremendous accomplishment. Through the dedication and talent of our outstanding people, we continue to meet the challenges before us while maintaining a clear focus on our vision for the future," said Kirch. "Whether providing world-class care to a new mother and her six tiny infants or effectively managing the health of a pioneering patient in the field of artificial heart devices, our faculty, staff, management and students have shown the world they are committed to our patients and their families, and to achieving excellence in our missions of clinical care, medical education and biomedical research."

The medical center's current fiscal year ends on June 30. Estimates for the year (as of Monday, June 21) project the medical center to post a final positive margin of nearly $16 million. Total revenue is projected at more than $595 million. Total expenses are projected at nearly $579 million, which includes the Academic Support Payment required to fund teaching and research activities through Penn State College of Medicine.

Projections show the medical center will provide more than 700,000 outpatient clinic visits, more than 45,000 Emergency Department visits, more than 18,000 surgical cases, and more than 23,000 hospital admissions this year. Clinical activity has increased over last year. Surgical cases have shown the largest growth with an increase of nearly 15 percent; outpatient visits increased by 12 percent; admissions have increased 8 percent; and Emergency Department visits have gone up by nearly 7 percent.

As the medical center experienced substantial growth, it also did well in patient satisfaction when compared to its academic medical center peers. The University HealthSystem Consortium (UHC) ranks Penn State Hershey fourth out of 36 participating teaching hospitals nationwide in adult inpatient satisfaction.

"We continue to transform this medical center through the efforts of our many dedicated employees who have embraced change and worked tirelessly to improve the way we care for our patients, pursue biomedical discovery and educate the next generation of health-care providers," said David S. Hefner, medical center executive director and chief operating officer. "We must continue to think and act anew if we are to build the foundation for sustained and focused growth."

Kirch and Hefner, expressed satisfaction with the medical center's increased financial stability over the past year, but cautioned that internal and external pressures continue to exist. They cite ongoing challenges such as high medical malpractice insurance costs, up to approximately $30 million this year from just $4 million in 1997. Increased blood supply and pharmaceutical costs, substantial competition to recruit and retain the best nurses, doctors and other care providers amid a national health-care labor shortage also are significant factors that prevent the medical center from posting adequate margins to fully fund the college's academic mission.

The funds from the medical center's operating margin are used to fund the organization's vital missions of research and education with an academic support payment to the College of Medicine.

"The funding model remains broken. We are disproportionately relying on our clinical operation to help fund the College of Medicine at a time when the medical center itself has substantial needs in terms of capital investment," said Hefner. "As the lowest publicly funded medical school in the nation (Penn State College of Medicine is 75th out of 75 publicly funded medical schools nationally), we continue to rely heavily on our clinical income to help support our vital missions of research and medical education. It is an essential investment because we are the only teaching and research hospital in central Pennsylvania, but with the margin we have to make that investment gets smaller every year and taxes our ability to reinvest in the people and technology that make us world class."

"We are committed to growing this organization and the services we provide, which can only lead to improved health and more jobs throughout the region, but we must develop operating margins that will allow us to reinvest in our infrastructure," said Kirch. "If we can do it successfully, and overcome the many regulatory and economic pressures being placed on teaching and research hospitals like ours, the beneficiaries will be the people and businesses of central Pennsylvania".

Last September, Kirch unveiled the findings of a study revealing the economic impact of Penn State Hershey on the region and the state. According to the study conducted by an independent firm, Tripp Umbach Healthcare Consulting Inc., the statewide economic impact of Penn State College of Medicine and Penn State Milton S. Hershey Medical Center equaled $613 million in 2002. The study also concludes that the Penn State Hershey campus generated nearly $35 million in state tax revenue and more than 13,500 jobs both directly and indirectly. Over the past year alone, the medical center added nearly 600 new employees.

"There is no question we are an economic engine as well as a substantial contributor to the quality of life in our region," concluded Kirch. "As we move forward with plans for a new Penn State Children's Hospital, Penn State Cancer Institute facility and expanded research facilities, our economic impact can only grow further."

Among the many high-profile patient stories out of Penn State Hershey Medical Center in the past year, two were featured at the board meeting. They included a recent baby boom involving sextuplets and quadruplets born with weeks of each other, and the story surrounding Gayle Snider, a 36 year-old man from York, and his triumph over congestive heart failure through the use of the Arrow LionHeart left ventricular assist device.

Just one day after Mother's Day, the medical center welcomed the Gosselin sextuplets. The birth of the six babies was only the second of record in Pennsylvania, and the first in the medical center's history. The Gosselin sextuplets have been progressing on target and are expected to be discharged from Penn State Children's Hospital within the next few weeks.
Kate Gosselin, mother of the sextuplets, attended the public board meeting, where she acknowledged the efforts of their Penn State Hershey caregivers.

Snider, the first U.S. patient to go home from the hospital with the Arrow LionHeart heart assist device, went home with a new human heart in June. Snider was kept alive for more than one year by the left-ventricular heart assist device (LVAD) before receiving a transplanted heart. His release from the hospital came just more than two weeks following his heart transplant on Saturday, May 22.

The College of Medicine held its 34th annual commencement on Sunday, May 16, conferring degrees upon 115 medical students and 38 graduate students. Four students earned both their doctor of medicine and doctor of philosophy degrees through the college's NIH-supported M.D./Ph.D. program, one of only 40 such programs in the country.

Fiscal Year 2003-04 saw additional growth in research funding at the medical center and College of Medicine. As of June 21, the institution was awarded more than $92 million in sponsored support. With more than a week remaining, sponsored funding for fiscal year 03-04 has exceed last year's total of $85 million by more than $7 million. Sponsored funding for research has increased steadily over the past five years up from $54 million in 2000.

"We recognize that we are a driving force in the discovery of new treatments, diagnoses and technology for treating and preventing disease. We also understand the vital contribution our research endeavors make to our regional and statewide economy," stated Jay Moskowitz, associate vice president for health sciences research, and vice dean for research and graduate studies. "That is why we have placed a renewed emphasis on the importance of research at the medical center campus and within our region, and why we have increased our focus on collaboration within the college and medical center, with our colleagues at Penn State University and with partners from private industry and other academic institutions."

"Our substantial research growth is due to our excellent faculty, scientists and staff who continue to exhibit extraordinary dedication, initiative, and expertise in the pursuit of new and important biomedical knowledge," Moskowitz continued.

In March, Penn State Milton S. Hershey Medical Center was awarded a $4.7 million grant from the Pennsylvania Department of Health's share of the national tobacco settlement to establish the Central PA Center of Excellence for Research on Pregnancy Outcomes.

Under the direction of principal investigator, Carol S. Weisman, professor of health evaluation sciences and obstetrics and gynecology, Penn State College of Medicine, the center's primary goal is to improve women's health status and health care before conception in high-risk, medically underserved populations in central Pennsylvania, with a special focus on rural areas.

The award was part of a $22.5 million disbursement of funds announced by Calvin Johnson, Pennsylvania health secretary, on behalf of Gov. Edward G. Rendell, March 11. The grants established five Centers of Excellence to reduce disparities in lung disease and pregnancy outcomes. In addition to the Center of Excellence at Penn State Hershey Medical Center, centers were established at Drexel University, University of Pennsylvania, Temple University and The Wistar Institute.

This past spring, Christopher C. Norbury, assistant professor of microbiology and immunology, Penn State College of Medicine, Penn State Milton S. Hershey Medical Center presented data from a study he led revealing new information about how viral proteins move between cells and alert the immune system suggesting that a double-punch approach to vaccine design would make them more effective.

In a previous study, the team found that the protein pieces presented via direct priming are usually very short-lived but produce peptides very efficiently. However in cross priming, because transfer to another cell takes time, rapidly degraded proteins are inefficient at generating peptides.

In May, William J. Weiss, principal investigator and associate professor of surgery and bioengineering, Penn State College of Medicine, Penn State Milton S. Hershey Medical Center and other Penn State researchers were awarded a $5 million contract from the National Heart, Lung, and Blood Institute of the National Institutes of Health to develop a pediatric heart assist device.

Few heart assist pumps have been developed or adapted specifically for use in children. Most currently available heart assist devices were designed for adults and are too large for pediatric patients. Currently, short-term heart or heart/lung support is available for children via extracorporeal membrane oxygenation, or ECMO, and the Bio-Pump, but both provide support for only a few days to, at most, a few weeks. Other devices either are not available in the United States, or are adaptations of adult technology, which are not useful for very small children and infants.

Penn State researchers have acquired significant expertise in the design, development, clinical use and technology transfer of circulatory support systems. Among their accomplishments are the adult-sized Pierce-Donachy pneumatic ventricular assist device manufactured by Thoratec Corp., Pleasanton, Calif., the Arrow LionHeart, a fully implantable ventricular-assist device developed at the College of Medicine in cooperation with Arrow International, Reading, and currently in clinical trials, and the Penn State Total Artificial Heart currently under further development by Abiomed Inc., Danvers, Mass.

(Media Contacts)

Last Updated March 19, 2009