This year, 2018, marks 25 years since the University of Pennsylvania Health System (UPHS) was first established—a milestone that would undoubtedly make the institution’s founder, Benjamin Franklin, proud.
By Steve Graff and Rachel Ewing
Illustrations by Graham Perry
After 25 years, the combined mission of patient care, medical education, and research that define Penn Medicine is a proven principle. As Penn Medicine’s model has evolved over this quarter century, it continually demonstrates itself to be visionary, collaborative, resilient, and pioneering, all while maintaining Franklin’s core, altruistic values of serving the greater good and advancing knowledge.
Penn Medicine’s reach and impact would impress the lifelong teacher and inventor as well. One of the first integrated academic health systems in the nation, UPHS grew from a medical school with one owned teaching hospital and a network of physician practices in the early years to a sprawling $8 billion enterprise with six acute-care hospitals and hundreds of outpatient practices that serves a diverse group of patients across the continuum of care and across the region, from Center City Philadelphia to central New Jersey to the western reaches of Lancaster County, Pa. Alongside its clinical care, Penn Medicine—as it is known today, encompassing both UPHS and the Perelman School of Medicine—boasts one of the nation’s top-regarded education and training programs for 21st century physicians within mere steps of a small city of cutting-edge research facilities producing translational discoveries that have elevated the institution into the higher levels of advanced medicine.
“We serve the region with the most advanced medical procedures as well as convenient and geographically distributed primary care,” said Ralph W. Muller, chief executive officer of UPHS. “Our innovations in patient care are models for the nation, as we both anticipate and shape what patients need.”
In the early 1990s, under then-CEO and Dean William N. Kelley, MD, transforming Penn’s traditional academic center—a teaching hospital, medical school, and research facilities—into an integrated system was viewed as a bold but necessary move. Penn’s medical leaders saw integration as a path to greater patient reach in a changing health care market. Combining that with stronger cultural integration among the pillars of the academic center and heavy investments in research infrastructure, Penn could leverage that integration to cement its place as a national leader in medicine.
But there were bumps in the road. A few years after its establishment, UPHS was one of many health care organizations in a precarious financial situation in the late 1990s. While some academic centers questioned holding onto their hospital counterparts, Penn ultimately managed itself out of its difficulties through governance and financial restructuring, heightened integration with the University, and fresh leadership, which put it on a more sustainable and successful path. Staff loyalty persisted, and patient care, research, and education only grew stronger.
Today, Penn Medicine employs over 40,000 people and serves millions of patients, from primary to the most complex care. Its medical school graduates some of the brightest minds and leaders in medicine. Its research endeavors have led to five U.S. Food and Drug Administration drug approvals within the last year alone.
And, through it all, integration—across missions, across disciplines, and across geography—has been key to success.
“Being on this campus, with the Wharton School, School of Engineering, Arts and Sciences, Nursing, Dental, Vet has a big impact day in and day out on what happens here and what happens elsewhere,” said J. Larry Jameson, MD, PhD, dean of the Perelman School of Medicine and executive vice president of the University for the Health System. “I think the combination of integration within Penn Medicine and the integration within the University has created an environment where we really have very few peers.”
Growing Reach in Patient Care
HUP (center) is nestled in the University of Pennsylvania campus, and connected with the PCAM, Roberts, Smilow, and JMEC facilities (left). The new inpatient Pavilion rises between them.
The driving force behind the birth of the health system and its continued growth hasn’t changed in 25 years: high-quality care for patients throughout the region, and beyond.
The University of Pennsylvania Health System started as an inner-city hospital linked with Penn’s medical school and a network of regional primary care and specialty physicians, called Clinical Care Associates, that continues today. From there, its boundaries swelled, as the Hospital of the University of Pennsylvania (HUP) was formally joined by two Philadelphia hospitals, each with a longer history of partnering with Penn as teaching sites, and the number of primary and specialty outpatient facilities also grew, with additions stretching across the map.
By the mid-2000s, Penn Medicine began its unprecedented growth spurt, starting with the construction of HUP’s interconnected clinical-research-education hub, with the outpatient Perelman Center for Advanced Medicine (PCAM), a “one-stop shopping” facility for patients requiring complex multispecialty care, and Roberts Proton Therapy Center; Smilow Center for Translational Research; and Jordan Medical Education Center (JMEC). Over the last five years, three more hospitals from central Pennsylvania to central New Jersey joined the health system—Chester County Hospital, Lancaster General Health, and Princeton Health.
A decade ago, Penn Medicine saw 1.4 million outpatient visits and 40,000 inpatient admissions per year. That reach has soared as the system grew: Penn Medicine now cares for patients who visit over five million times per year in both its inpatient and outpatient facilities. Both the Perelman Center and many regional sites offer one-stop convenience for multiple outpatient specialty appointments; and for patients with serious or chronic illnesses, Penn Medicine’s home care services have substantially grown.
“It went from a well-regarded mid-Atlantic, rather HUP-centric system, to a national powerhouse academic health system,” said Peter D. Quinn, DMD, MD, senior vice president for the Clinical Practices of the University of Pennsylvania and the newly developed Penn Medicine Medical Group, an umbrella organization to support physicians across the entire system. “The three downtown hospitals are almost functioning as one big medical campus. We’ve merged with other hospitals…and we’re coordinating a geographic distribution of practices, which allows our patients access to care closer to home and work. The game changer that will take Penn to the next level stratosphere is the $1.5 billion Pavilion—the hospital of the future.”
5 Ingredients for a Powerhouse in Patient Care
The decision to unite into an integrated system was only a first step in the recipe for Penn Medicine’s success. “If you look at the top hospitals in the country today, most are part of integrated systems,” said UPHS CEO Ralph W. Muller. “But integration alone is not what makes us great.” Muller and other Penn Medicine leaders point to a few key ingredients that have made the organization successful. Read more…
Penn Medicine Hospital CEOs Reflect on Integration Then and Now
A longtime leader at Penn Medicine, for the last 18 years, Michele Volpe has led one of the health system’s earliest additions, Penn Presbyterian Medical Center, through a period of tremendous growth. What began as a community hospital has become a preeminent medical center ranked, under a combined enterprise with HUP, among the top 20 institutions in the nation. More recently, Jan Bergen became president and CEO of Lancaster General Health when it became part of Penn Medicine in 2015—a natural fit for two systems known for their innovation, depth of resources, and community commitment. In a pair of Q&A conversations, both CEOs reflect on their hospitals’ journeys as part of the larger integrated system. Read more…
“We have a culture that encourages people to be bold, collaborate, and cross disciplines,” said J. Larry Jameson, MD, PhD, dean of the Perelman School of Medicine. “The many centers and institutes that we have created and supported with resources are terrific cabinets for that kind of collaboration…. That combination of people, tools, and the culture are the ingredients for success.”
J. Larry Jameson believes answers to seemingly intractable problems can appear with the help of a fresh set of eyes and perspectives. That’s why he’s so keen on having cancer researchers rub elbows with neuroscientists studying aging, ophthalmologists work alongside veterinarians, and people with engineering backgrounds camp out in operating rooms.
“Partnering with others with different perspectives can spark ideas of how to build a biomedical device in a different way,” Jameson said.
It’s the kind of thinking that now permeates many corners of Penn Medicine, where faculty and staff from dozens of institutes, centers, and departments work in multidisciplinary teams across all of Penn’s 12 schools pursuing the toughest questions in medicine and health care.
“There are two major differences that separate Penn Medicine from others,” Jameson said. “The first is we are a fully integrated organization…meaning the health system, the faculty practice plan, research, and the medical school are part of one organization. The second major difference is that we are fully integrated within the university, not only by governance but also geography.”
Having all of those minds in one place, in a spirit of collaboration, for decades, has yielded dividends.
The health system’s highly integrated approach was devised early on, in part, to contend with the increasingly complex problems facing society.
“It was this emergence of centers and institutes in the 1990s and the sense that to be a successful research enterprise we were going to need to be more interdisciplinary. We had to work across the campus,” said Deborah Driscoll, MD, chair of the department of Obstetrics and Gynecology, and director of Penn’s Center for Research on Reproduction & Women’s Health. “We started thinking about women’s health more broadly, bringing in members from other departments, from the vet school, Nursing, Children’s Hospital of Philadelphia to help us solve global health problems like preterm birth. Penn emerged as a national leader and this transdisciplinary approach to research has contributed to our success.”
The push for integration ramped up further at the turn of the century under former University President Judith Rodin, PhD, and intensified with current President Amy Gutmann, PhD. Gutmann has championed greater interdisciplinary collaborations since she first arrived, most notably with Penn Integrates Knowledge (PIK), an initiative that supports professorships for faculty whose work draws from two or more disciplines housed in different Penn schools. Out of 22 PIK professors today, 12 have appointments in the medical school.
The program was emblematic of a number of shifts that enabled a longstanding perceived division between the health system and the University to finally fade away.
“The thought was the medical school and health system was something across Spruce Street, but when I was there, I tried to make that idea disappear...and that worked,” said Arthur Rubenstein MBBCh, who served as executive vice president of the University for the Health System and the medical school’s dean from 2001 to 2011. “When opportunities happened, with the dental school or vet school, I was there in the deliberations, and I felt empowered to go out and implement President Gutmann’s agenda or add to it—and make the medical school and the other schools partner.”
“They viewed the medical center as an integral part of the university for the first time,” he added. “It was a two-way thing. We felt like connected parts of a whole.”
Paying it Forward
Integration with both the University and within Penn Medicine continued under Rubenstein’s tenure, and only strengthened as new leaders joined, including Ralph Muller, CEO of UPHS, in 2003, and then Rubenstein’s successor, Jameson, in 2011, all of whom helped fuel many newer multidisciplinary initiatives.
“Penn Medicine today propels the most groundbreaking, interdisciplinary research and clinical care in the world,” Gutmann said. “Our strategy for delivering breakthrough medicine to hundreds of thousands of patients has keenly focused on connecting the highest quality medical education and clinical care with innovation powerfully driven by teams working across traditional boundaries on Penn’s campus and beyond. Connectivity and creativity come together to make our academic health system an inspiring anchor for the entire Penn community. The ripple effect is vast: This work is mapping the future of medicine for the whole world.”Today, 25 free-standing interdisciplinary centers and institutes and countless basic science and clinical departmental centers exist: from the Leonard Davis Institute of Health Economics to the Center for Sleep and Circadian Neurobiology to the Penn Epigenetics Institute.
“I have really enjoyed the integration with the rest of the university,” said David Asch, MD, MBA’89, GME’87, a professor of Medicine and Medical Ethics and Health Policy, who has also taught an undergraduate course for 20 years. “Intellectually, I feel like I’m a citizen of Wharton and the medical school and connected to many of the other schools. This is something that literally no other university can pull off.”
Asch is also executive director of the Penn Medicine Center for Health Care Innovation (PCHI), a center created as it became clearer how vital a role behavioral economics and innovation play in the ever-evolving health care landscape. The center was created in part to leverage behavioral economics and technology to address patients’ health needs during the “other 5,000 hours” when they are not at a clinical appointment. It not only drives innovation within Penn Medicine but exemplifies the organization’s push to transform the health system—and everything outside of it.
“I think PCHI is a leading center… because we have been pretty deliberate about educating the rest of the world about what we are doing,” Asch said. “In the end, if it’s important for Penn Medicine to be doing it, then we should be teaching it.”
“Many health systems have innovation centers,” said Roy Rosin, MBA, Penn Medicine’s chief innovation officer. “What makes ours unique is the breadth of activities embedded throughout the system to improve processes for everybody. We’re lucky to have the support and team able to craft novel care delivery models that have started to become national best practices.”
Research Engine Revs Up
Benjamin Franklin famously said, “diligence is the mother of good luck.” And indeed decades of hard work and significant institutional investment underlie the good luck Penn Medicine has celebrated in recent months. Since last year, the Food and Drug Administration has approved multiple new therapies developed at Penn Medicine—including cellular and gene therapies that were the first of their kind—to treat cancer, reverse blindness, and more. Penn Medicine’s leaders say that this translation of breakthrough discoveries into new treatments and improved health is only accelerating.
Philanthropic support from donors at every level has been a vital element undergirding Penn Medicine’s growth and achievements of the past 25 years. The number of donors has increased by almost 200 percent since the health system’s founding in 1993. The giving rate for Penn’s medical alumni in 2018 is 26 percent, one of the highest rates among peer institutions.
Academic health systems treat millions of patients, educate the medical workforce, and conduct groundbreaking research, but they’re also vital economic anchors for their communities. In fact, they contribute more than $562 billion in gross domestic product (GDP)—which translates to about 3.1 percent of the total U.S. GDP, on par with the transportation and food services industries—and support over 6.3 million jobs.
As the largest private employer in Philadelphia along with the University, Penn Medicine has had a profound and growing economic impact around the city and throughout Pennsylvania and New Jersey. The system generates a spectrum of jobs, attracts new businesses, and causes a ripple effect of dollars spent in the surrounding communities. In fiscal year 2017, Penn Medicine provided $500 million to benefit the community.
“We’ve contributed to the economic vitalization in Philly,” said Ralph Muller, CEO of UPHS. “We recruit and hire great people, who become part of the workforce and intellectual life of the city and buy houses, go to restaurants, art centers and museums. We have built billions of dollars of buildings, which is a major source of construction jobs, as well as the anchors of redeveloping neighborhoods. It’s a powerful combination of forces that cause us to be great place for medical care, and Philly a great place to live.”
CEO Ralph W. Muller announced this year that he will retire in June 2019 after leading UPHS for 17 years of its 25-year history. He’s eager to acknowledge the staff who make Penn Medicine great and to share his game plan for success.
Ralph Muller has a penchant for sports metaphors when talking shop. So it’s fitting he slipped one in talking about the quarter-century milestone moment for UPHS.
“You start winning some ball games, and all of the sudden people believe you are going to start winning some more,” he said. “We improved patient care, emphasized nursing, and markedly improved our finances.”
The metaphor not only captures the momentum the health system experienced during his tenure, but also the man behind so much of it.
“Penn is one of the great health systems in the country, if not the world,” said William Ferniany, PhD, CEO of the University of Alabama at Birmingham Health System who was the chief administrative officer at UPHS from 1992 to 2006. “Ralph has done a fabulous job there, leading it. Penn is strong as it can be. It supports a strong research mission. You don’t find much better than Penn. It has come an enormous way since 1992.”
When Muller arrived in 2003, Penn Medicine was in need of strong leadership to continue navigating the turnaround from its late-1990s financial downturn. Arthur H. Rubenstein, MBBCh, had been executive vice president of the University and dean of the medical school for two years and knew that his former University of Chicago colleague Muller, a former social scientist who led that university’s health system for 16 years, had the diverse set of health policy, economic, and executive skills that Penn needed to excel.
Muller emphasized fiscal discipline and smart investment as he guided the health system through its financial turnaround. But Muller’s transformative efforts also focused on staff training and smartly growing the system, implementing a fiscal innovation called “Funds Flow” for the sharing of resources across the enterprise; after 12 years, this has become a national model of strategic program building.
“In my opinion, as to force of intellect—clear, linear, rigorous, brilliant thought—Ralph Muller is unsurpassed in American health care,” said David Bradley, who specialized in academic medical centers as the founder and longtime owner of the Advisory Board Company, and who is now chairman of the Atlantic Media. “At the University of Chicago and at Penn, Ralph awoke these dormant enterprises and fashioned them into shining models of what health care can be in this country. Ralph is the most uncommon talent in academic medicine.”
Muller has overseen $6 billion in investments on outpatient and inpatient facilities.
“I always remember him telling us you are never going to improve your bottom line by just cutting costs, you have to grow. And grow Penn did,” said Deborah Driscoll, MD, chair of the department of Obstetrics and Gynecology.
Today, people within a 100-mile radius of Philadelphia can access Penn Medicine facilities close to home. Muller also championed leadership development, and the Penn Medicine Academy today is the lynchpin of the organization’s emphasis on learning and managing change.
Muller has also been described as a transformative and visionary leader, with a knack for interacting with people, from the C-suite down.
“It goes beyond just the doctors,” said Peter Quinn, DMD, MD, senior vice president for the Clinical Practices of the University of Pennsylvania. “He knows the person at the information desk. He knows the environmental services people. He has great people skills, and I think that is part of his success.”
And he has a “tremendous intuition on what to do at the right time,” Rubenstein noted.
Those instincts have paid off. Penn Medicine has consistently earned rankings among the nation’s top honor roll hospitals by U.S. News and World Report, and this year, was named the top health care employer in the nation and the #6 employer overall by Forbes magazine, as well as the #2 employer for women.
“We are now seeing the most successful health system in the country, and I am proud of the fact I’ve helped be a part of that,” Muller said. “It comes down to great patient care and staff, who I feel privileged to work with and who do a great job.”
Many will also remember his strong civic engagement, having led the creation of the Penn Medicine High School Pipeline and CAREs grant programs—two initiatives that underscore the institution’s founding mission of public service.
“Ralph’s leadership of the health system has been in keeping with what has always made Penn great,” said J. Larry Jameson, MD, PhD, dean of the Perelman School of Medicine and executive vice president of the University for the Health System. “He recognizes that, when you work together, everybody is better off. Now we are 40,000 strong, working together to promote the good of society. It’s where Ben Franklin started and it is where we are today.”
Online Extra: In Their Words
Not all of the insights and reflections about Penn Medicine’s trajectory over the last quarter century could fit in the printed magazine story. Read more…