The Board of Trustees on May 12 took final action to complete Penn State's demerger 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 employees, 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, the 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 people, 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 gained 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 necessary in a competitive health care environment, according to officials.
The success of this clinical enterprise is essential to support the College of Medicine, which will remain 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 in an ex-officio capacity 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.
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:
n Donald M. Cook Jr. -- 2002;
n Carol Herrmann -- 2003;
n Steve A. Garban -- 2001;
n Edward P. Junker III -- 2003;
n L.J. Rowell Jr. -- 2001;
n Gary C. Schultz -- 2001;
n Graham B. Spanier -- 2002;
n William L. Weiss -- 2003; and
n Mimi Fredman -- 2002.
The 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."