Penn State Hershey and PinnacleHealth System Receive Board Approval for New Health Enterprise

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.

Board of Trustees committee approves plan to bring together Penn State Hershey and PinnacleHealth

The Penn State Board of Trustees Committee on Finance, Business and Capital Planning today (Jan. 15) approved a plan to bring Penn State Milton S. Hershey Medical Center and PinnacleHealth System together to form a new health enterprise. In doing so, the committee advanced a recommendation to the full University Board of Trustees to approve the plan. It is anticipated that the Board of Trustees will consider a motion to approve the plan at its meeting on March 20.

If approved by the Board of Trustees in March, the plan would still require approval from the state Attorney General and the Federal Trade Commission.

The approval of the plan by the committee 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 Hershey and PinnacleHealth signed a letter of intent to bring their two systems and their joint venture, Pennsylvania Psychiatric Institute, together into a new health enterprise.

This proposed collaborative and innovative enterprise would bring together a high-performing university medical center and a community health system known for its quality outcomes and patient-focused care. It would provide increased access to a wider range of services and full spectrum of care to patients over a broader geographic base.

The proposed new enterprise could fall under the umbrella of Penn State Health, a not-for-profit entity created by the University in September 2014.

Penn State Health was developed to enable the University to bring Penn State Milton S. Hershey Medical Center and its various health care services, including Penn State Hershey Children’s Hospital, Cancer Institute and Medical Group, as well as the Penn State Hershey Health System and its associated entities, together with other health care facilities. Such facilities could include hospitals, surgery centers, home health providers and similar organizations.

PinnacleHealth System CEO responds to Paz appointment to position at Aetna

Penn State Hershey and PinnacleHealth System recently announced plans to form a new health enterprise in central Pennsylvania. Michael A. Young, FACHE, president and CEO of PinnacleHealth, offered the following statement regarding the decision by Dr. Harold L. Paz, chief executive officer of Penn State Hershey Medical Center and Health System, Penn State’s senior vice president for health affairs and dean, Penn State College of Medicine, to accept the position of executive vice president and chief medical officer at Aetna.

“I have been fortunate to work with Dr. Paz on many projects,” Young said. “In addition to his extensive knowledge and experience, he has always shown a deep-felt concern for his patients, staff and students. I’m sure he will do an outstanding job at Aetna. While we will miss Dr. Paz’s support, PinnacleHealth System and Penn State Hershey will continue on our path to create a new health enterprise that will be better positioned to improve the health of area residents and find new opportunities to deliver high quality, cost-effective care.”

Paz’s last day at Penn State Hershey will be Monday, July 28. Penn State President Eric Barron has appointed Dr. A. Craig Hillemeier to serve as CEO, senior vice president for health affairs and dean of the College of Medicine upon Paz’s departure.

PinnacleHealth and Penn State State Hershey Sign Letter of Intent

HARRISBURG, Pa. (June 26, 2014) — Today Penn State Milton S. Hershey Medical Center and PinnacleHealth System have signed a letter of intent and term sheet with the intent to form a new health enterprise in central Pennsylvania. This new collaborative and innovative enterprise will bring together a high-performing university medical center and a community health system known for its quality outcomes and patient-focused care. It will provide increased access to a wider range of services and full spectrum of care to patients over a broader geographic base.

This new health enterprise would be governed by a new board with equal representation from both organizations. Under the proposed structure, Harold L. Paz, M.D., M.S., chief executive officer of Penn State Hershey Medical Center and Health System and Penn State’s senior vice president for health affairs will oversee the health enterprise as the CEO. Michael Young, President and CEO of PinnacleHealth System, will oversee the operations of the enterprise as President.

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Penn State Hershey and PinnacleHealth select advisor to explore expanded relationship

HARRISBURG, Pa. — Penn State Hershey and PinnacleHealth today announced the selection of Cain Brothers & Company as the strategic advisor to guide their exploration of an expanded relationship between the two organizations.

In November, Penn State Hershey and PinnacleHealth announced they were discussing ways to broaden the collaboration between their health care systems, with the goal of improving access to care and increasing the quality and breadth of health care services available to people throughout central Pennsylvania. Any collaboration would also strengthen the important role their hospitals play within the community and enhance the teaching and research missions of both organizations.

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PinnacleHealth System and Penn State Hershey to Explore Enhanced Relationship

HERSHEY, Pa. —Penn State Hershey and PinnacleHealth have entered into formal discussions to broaden their existing strategic relationship. The goals of the potential relationship are to improve access to care and increase the quality and breadth of health care services available to people throughout central Pennsylvania. Any collaboration would also strengthen the teaching and research missions of both organizations.
The two organizations are in the process of selecting an independent third-party firm to help explore potential opportunities for the two health care organizations to expand their relationship.

Currently PinnacleHealth and Penn State Hershey collaborate in a number of ways. Both are joint venture partners in the Pennsylvania Psychiatric Institute. Founded in 2008, the Institute comprises a 74-bed teaching and research hospital and three outpatient practices that provide specialized mental health services to pediatric, adolescent, adult and geriatric patients.

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