The Penn State Board of Trustees today (March 20) approved a proposal to bring the Milton S. Hershey Medical Center and PinnacleHealth System together to form a new health enterprise under the umbrella of Penn State Health. The PinnacleHealth System Board of Directors voted earlier in the week to also approve the plan.
The proposal still requires approval from the state Attorney General and the Federal Trade Commission (FTC). Penn State and PinnacleHealth expect to file the required paperwork within the next few weeks. Both health systems will continue to operate independently and as normal until necessary approvals to join as members of the new enterprise are obtained.
The approval of the plan by the Board of Trustees is the latest step in formal discussions to expand collaboration between the two health systems, which began in November 2013. In June 2014, Penn State, Penn State Hershey and PinnacleHealth signed a letter of intent to bring the Milton S. Hershey Medical Center, PinnacleHealth and their joint venture, Pennsylvania Psychiatric Institute, together into a new health enterprise.
“This new health enterprise is a win for our patients, students, researchers and central Pennsylvania communities because we can offer our academic expertise and advanced care to a broader patient population,” said Dr. A. Craig Hillemeier, dean of Penn State College of Medicine, chief executive officer of the Medical Center, and Penn State’s senior vice president for health affairs. “PinnacleHealth and Penn State Hershey see this new health care enterprise through the same lens – that our longstanding individual commitments to quality and safety, combined into one health system, would give us the scale we need to continue to improve outcomes and reverse the trend of growing health care costs.”
Everything in the manner that health care is delivered, reimbursed and evaluated is evolving to reflect newly empowered consumers, innovative technologies, new medical procedures and a focus on improving the health of entire communities.
“With this vote, the leadership of Penn State Hershey and PinnacleHealth understand these changes and have embraced the challenge to achieve the ‘triple aim’ of health reform: continually improve quality of care, increase access to care, and lower cost of care,” says Michael A. Young, president and CEO of PinnacleHealth. “Our goal is to create a healthcare system focused on community needs and innovative solutions for the future of healthcare. By integrating expert clinical research capabilities, superior inpatient and outpatient care, the latest technological advancements and medical education and training, together we are positioned to provide a healthcare destination that promotes wellness and provides groundbreaking medicine.”
This innovative, collaborative enterprise will be a leader in providing low-cost services with strengths in primary care services, a broad ambulatory network, advanced medical and clinical research and an array of deep specialty and subspecialty medical care across a large geographic base. In addition, this effort secures a respected regional platform to educate and train future physicians and healthcare professionals.
Combined, PinnacleHealth and Penn State Hershey will expand on their long history of collaboration in allopathic and osteopathic training programs for medical students, residents and fellows.
“Recruitment of physicians and healthcare professionals to non-metropolitan areas is becoming increasingly difficult. We believe creating this new entity will attract interns, residents, fellows and physicians’ assistants who may wish to continue their careers in central Pennsylvania,” Young says.
These same systems will have increased local access to advanced clinical research trials, including cancer, cardiology, and children’s medicine along with other leading specialties.
The combination of these two health systems will further stabilize access to high quality healthcare services in the region and economically enhance the region’s business community.
Under the proposed structure Dr. A. Craig Hillemeier, current College of Medicine dean, Milton S. Hershey Medical Center CEO and senior vice president for Health Affairs at Penn State, has been proposed to serve as the CEO of the new organization. Michael Young, president and CEO of PinnacleHealth, is proposed to serve as the president and COO.
The new organization will be governed by a 16-member board of directors made up of eight directors drawn from Penn State and Milton S. Hershey Medical Center boards and eight directors, including the initial board chair, drawn from the PinnacleHealth System board. A majority of the 16 directors are to reside within a 50-mile radius of the midpoint between Harrisburg Hospital and the Milton S. Hershey Medical Center, assuring a continued focus on the healthcare needs of the Capital Region.
In separate action today, the Penn State Board of Trustees appointed the first eight members of the Penn State Health Board of Directors:
- Dr. Craig Hillemeier (Penn State Hershey Health System and Medical Center Boards of Directors and CEO)
- Dennis Brenckle (Medical Center Board of Directors)
- Peter Carlino (Medical Center Board of Directors)
- David Gray (Penn State Hershey Health System and Medical Center Boards of Directors)
- Rod Erickson (Penn State Hershey Health System and Medical Center Boards of Directors)
- Mark Dambly (Penn State Hershey Health System and Medical Center Boards of Directors)
- Keith Masser (Penn State Hershey Health System and Medical Center Boards of Directors)
- Kathleen Casey (Penn State Board of Trustees)
The trustees noted that additional Penn State Health board members would be appointed should the partnership with PinnacleHealth come to fruition following FTC and attorney general review.