Penn State Intercom......January 31, 2002

University officials believe
independent hospital would
best serve residents

Letter from President Spanier

The proposal to have Centre Community Hospital (CCH) embark on a preferred partnership with Geisinger Health System is not in the best interests of residents of the State College area, according to Penn State officials.CCH_Stadium

Penn State donated about 30 acres of land in 1968 to help create Centre Community Hospital in State College. The covenants of the donation call for the hospital to be independent, locally controlled and accessible to all.

"The independence of the hospital is now threatened by an agreement being negotiated with Geisinger that would designate Geisinger as a "preferred partner" of the hospital," according to President B. Graham Spanier. "Although about 30 percent of the physicians in the community are affiliated with Geisinger, 70 percent are not. The overwhelming majority of physicians in the community are opposed to this preferred financial partnership with Geisinger, which could exclude the participation of some physicians in the community."

Penn State employees and retirees, along with their dependents and University students, comprise approximately one-half of the patients who annually use Centre Community Hospital. The University spends about $80 million annually on health benefits, a significant portion of which is expended in the Centre Region.

"Access for our employees to CCH -- and the widest range of physicians in the community -- is an issue of great importance to our institution," Spanier said.

"If Geisinger was to have a preferred arrangement with CCH, they would have a dominant influence in the provision of services as well as setting the prices for medical procedures and tests. This is not an appealing scenario in terms of service choices and cost containment for escalating health-care costs," he said.

"Moreover, Geisinger has a history of excluding certain health-care providers from their own network, operating rather independently of the rest of the medical community," Spanier said.

"We also are concerned about having a major provider and health plan from outside the Centre Region having a substantial financial stake in local health care. We much prefer an independent hospital, financed and operated locally, with any excess of revenue over expense staying in the community to improve facilities and enhance the quality of health care," he said. "Penn State is prepared to cooperate fully in supporting the continued financial independence of the Centre Community Hospital."

University officials have called on the Centre Community Hospital board of directors to delay action on their proposed partnership with Geisinger until there is an opportunity for local doctors and other local interests to propose alternatives that would preserve the independent character of the hospital.

The impending agreement between Centre Community Hospital and Geisinger first became public two weeks ago during a meeting of the Penn State Board of Trustees.

"We wanted you to be aware of this information, because it could have a dramatic impact on health choices and options for years to come," Spanier said.

 


Letter from President Graham B. Spanier

Editor's note: The following letter was sent via e-mail to faculty and staff on the University Park campus Thursday, Jan. 24.

You may have read news reports this past week regarding concerns I have expressed about a pending arrangement between Centre Community Hospital and the Geisinger Health System. I am writing to explain why this matter is so important to Penn State and the citizens of the Centre region. I am sending this memo by e-mail because I wanted to communicate with you in the most timely fashion on an issue that will undoubtedly receive more media attention in the coming days.

Penn State donated about 30 acres of land in 1968 to help create Centre Community Hospital in State College. The covenants of the donation call for the hospital to be independent, locally controlled and accessible to all. The independence of the hospital is now threatened by an agreement being negotiated with Geisinger that would designate Geisinger as a "preferred partner" of the hospital. Although about 30 percent of the physicians in the community are affiliated with Geisinger, 70 percent are not. The overwhelming majority of physicians in the community are opposed to this preferred financial partnership with Geisinger, which could exclude the participation of some physicians in the community.

Penn State employees and retirees, along with their dependents and our students, comprise approximately one-half of the patients who annually use Centre Community Hospital. The University spends about $80 million annually on health benefits, a significant portion of which is expended locally. Thus, access for our employees to CCH -- and the widest range of physicians in the community -- is an issue of great importance to our institution.

If Geisinger was to have a preferred arrangement with CCH, they would have a dominant influence in the provision of services as well as setting the prices for medical procedures and tests. This is not an appealing scenario in terms of service choices and cost containment for escalating health care costs. Moreover, Geisinger has a history of excluding certain health care providers from their own network, operating rather independently of the rest of the medical community.

We are also concerned about having a major provider and health plan from outside the Centre region having a substantial financial stake in local health care. We much prefer an independent hospital, financed and operated locally, with any excess of revenue over expense staying in the community to improve facilities and enhance the quality of health care. Penn State is prepared to cooperate fully in supporting the continued financial independence of the Centre Community Hospital.

We have called on the Centre Community Hospital Board of Directors to delay action on their proposed merger with Geisinger until there is an opportunity for local doctors and other local interests to propose alternatives that would preserve the independent character of our hospital.

We wanted you to be aware of this information, because it could have a dramatic impact on health choices and options for years to come.

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