Traber Named Permanent CEO of Health System

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Dr. Peter G. Traber, the FrankWister Thomas Professor of Medicine who became the University of Pennsylvania Health System’s interim CEO in February when former CEO William N. Kelley was ousted [“Gazetteer,” March/April], was given the job on a permanent basis in March. Although he has not been made permanent dean of the Medical School, an appointment that Kelley also held, that is at least partly because the University’s own regulations stipulate that a nationwide search must be conducted. Dr. Robert Barchi Gr’72 M’72 GM’73, the provost, said that Traber, now interim dean, would be “seriously considered” for the permanent deanship.
   “My sense is that the [University’s] thinking is that the two positions should be linked,” said Traber in an interview. “I don’t see any deviation from that position.”
   Traber said he was “pleased” that his role as CEO became permanent so quickly, both for the “opportunity to face these challenges” and for the good of the Health System. “Whenever you have difficult times to navigate through,” he explained, “it’s good to know there’s permanency in leadership.”
   Penn President Judith Rodin CW’66 said that during his month as interim CEO, Traber had “shown the willingness and capacity to guide and manage Penn’s Health System in these complicated and difficult times,” adding: “Our trustees, medical faculty and staff have great confidence in him, as do I. He is clearly an able leader who will direct the Health System to future success.”
   Among Traber’s first moves was to terminate the services of the Hunter Group, a consulting firm that had made more than 400 recommendations for cutting the Health System’s deficit since last July. Traber emphasized that the Hunter Group “did a very good analysis of the Health System, from soup to nuts” and noted that many of their recommendations had been implemented. But though they had been “helpful in the transition,” he said, “we didn’t need them in the long term.” In a statement, Traber noted that he would “not hesitate to engage them again if we feel it would help us meet our goals.”
   Letting the Hunter Group go also paved the way for the return of Dr. Robert D. Martin, the Health System’s chief operating officer, who had resigned a couple of weeks after Kelley’s departure.
   “Them not being there was certainly a factor in him returning,” acknowledged Traber. “Certainly, Robert was of the opinion that they were not going to add value to what he had added, but he also thought they had performed a valuable function.” 
   High on everyone’s list of priorities is bringing the Health System back into the black. It posted a $198 million operating deficit in fiscal 1999 and a $91 million deficit in 1998. According to Traber, the financial recovery is proceeding well.
   “I think that we’re pretty much on target for this fiscal year,” he said. “It was a pretty dramatic turnabout we were attempting —from a $198 million loss to break-even, minus amortization, which was a $10 million loss. We’re going to be within shooting range [of breaking even], so it’s a pretty remarkable effort by everybody.” Traber defined “shooting range” as “within $5 million and $15 million” of breaking even, “which out of a budget of $2 billion is maybe close to spitting range.” He told The Philadelphia Inquirer that the Health System would post a two-percent profit in fiscal 2001.
   Asked if there were any significant changes on the horizon, Traber replied: “I think we are going to go through, over the next couple of months, a pretty intensive process of strategic planning and market analysis about where we want to be next year as well as long-term. 
   “The major issue that I want people to know is that the Penn Health System is healthy,” he added. “We’ve got a marked increase in patients; quality of care is high; the quality of physicians and nurses and staff is outstanding; and we’re going to come through the financial difficulty with the terrific quality that we’ve always had.”

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