The following was issued Friday, November 19, as one of a series of messages from Dr. William N. Kelley as CEO of the Penn Health System to the System's members.

PennHealth: Cutbacks and Changes

Dear Colleague:

I am pleased to report that we have made significant progress in implementing our Financial Recovery Plan. Although there is still more work to be done, we are moving forward in a strong and united way.

As you know, in October we committed ourselves to removing approximately 1,700 positions from our health services workforce. To date, we have identified and eliminated approximately 1,300. Between now and the end of the fiscal year, we will eliminate another 400 administrative/corporate positions, most through attrition. This process, the most painful component of our recovery plan, will soon be behind us.

We are taking the necessary steps to ensure that we thrive in this region's very volatile and difficult healthcare environment. And we are doing this while maintaining our core values.

It is a point of pride that even in the face of tremendous upheaval, we have met, and in some cases exceeded, our financial targets for the first quarter of FY 2000. Activity continues to be strong throughout the System. We should all feel proud of this considerable accomplishment. That we have been able to make these difficult decisions, redesign our work processes, and remain focused on our core mission attests to the aggregation of talent and commitment that have always been hallmarks of this institution.

I am especially delighted with how our faculty and staff have worked together to deal with the many changes that are occurring. In spite of our current economic challenges, I am optimistic that we will continue to be one of the top five academic health systems in the United States in our core missions of education, research, and health services.

We are working very hard to ensure our future by changing the things that we can control. As you know, there are also a number of issues in the external environment that affect us--and academic medical institutions nationwide--that have yet to be worked out. We are hopeful of positive movement on these fronts soon. These include improvement in areas such as state support for indigent care and research through tobacco settlement dollars, changes in the implementation of the Balanced Budget Act of 1997 at the Federal level, and better relationships with the HMOs in the region.

I will be keeping you informed of developments as we move forward with our recovery. Thank you for your continued support.

Almanac, Vol. 46, No. 13, November 23/30, 1999