PENN STATE BOARD RE-CREATES MEDICAL CENTER, APPOINTS BOARD
May 12, 2000
University Park, Pa. -- Today (May 12), Penn State's Board of Trustees took final action toward completing its de-merger with the Geisinger Health System.

As a result of the decision in November 1999 to end Penn State's affiliation with Geisinger on July 1, 2000 (the formal termination date of the affiliation), all personnel, equipment, licenses and other elements of the health care operations will be transferred to the control of the University.

This will include re-acquiring the Community Health Center building on Fishburn Road in Derry Township that was conveyed to Geisenger in 1997.

At its regular May meeting today, Penn State's Board of Trustees approved the establishment of a new Pennsylvania nonprofit corporation controlled by the University and named "The Milton S. Hershey Medical Center" for the purpose of employing personnel, owning equipment and holding the hospital and other licenses necessary to provide health care services.

All facilities at the Medical Center will continue to be owned by the University, but the hospital and physician clinics will be leased to the new corporation. There are a number of important advantages to be obtained by placing all health care services in a separate corporation. With oversight by a Board of Directors that can focus exclusively on the management and growth of clinical services, the new corporation will have greater flexibility to develop operational and employment policies that are necessary in a competitive health care environment.

The success of this clinical enterprise is essential to support Penn State's College of Medicine, which will remain as the fundamental purpose and mission of the new corporation.

The Board of Directors of The Milton S. Hershey Medical Center will consist of 14 members. Nine directors will be appointed directly by Penn State’s Board of Trustees. Penn State's Senior Vice President for Health Affairs, who also serves as Dean of the College of Medicine and Chief Executive Officer will serve ex officio as a director. In addition, one physician who chairs a clinical department will be appointed to serve.

The remaining three directors have been selected as part of the initial establishment of the new corporation and thereafter will appoint their own successors. Those directors are Dennis Brenckle, Peter M. Carlino and John H. Rhodes.

Together, these 14 directors will be responsible for governance of The Milton S. Hershey Medical Center, subject, of course, to the authority of the Board of Trustees to appoint and remove its appointees. The regular term of an appointed director will be three years, with the initial appointments made for terms of one, two and three years as noted in the resolution.

The resolutions approved by the Board of Trustees today confirm that the University will continue to fulfill its obligations as Successor Trustee of The Milton S. Hershey Medical Center through establishment of the new corporation to operate the clinical enterprise and make the necessary appointments to the Board of Directors. In addition, the resolutions authorize the re-acquisition of the Community Health Center building, and the lease of health care facilities to the new corporation.

The Board resolved that "The Pennsylvania State University shall continue to fulfill its obligations as Successor Trustee of The Milton S. Hershey Medical Center by and through the Pennsylvania nonprofit corporation known as The Milton S. Hershey Medical Center, which will provide health care services to the benefit of the public and will support the mission and purpose of the College of Medicine."

The following current and former Penn State Trustees and senior officers were appointed to the board and are listed with the expiration date of their tenure:

Penn State’s Board of Trustees also authorized officers of the University to "execute such documents and take such actions as are necessary to reacquire the Community Health Center building in Derry Township, Dauphin County, at net book value, and to lease to The Milton S. Hershey Medical Center such facilities as are necessary for furnishing health care services."

Contact: Christy Rambeau (814) 865-7517 or e-mail at c