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July 10, 1997

Pitt, UPMC will be more separate

It's not a divorce, but Pitt and the University of Pittsburgh Medical Center System (UPMCS) are growing apart.

At the Pitt Board of Trustees' June 26 meeting, Chancellor Mark Nordenberg announced a restructuring of the University-UPMCS relationship that will create a greater distinction between the two institutions.

The changes include the following:

* Pitt will merge the position of senior vice chancellor for Health Sciences, now held by Thomas Detre, with that of the dean of the medical school when Detre retires.

In May, Pitt launched a search for Detre's successor. George Michalopoulos is interim dean.

"The combining of those positions is not unusual," Nordenberg said. "This is an arrangement that has worked well in other universities. The decision to move Pitt in that direction now reflects my belief that enhancing the authority of the senior academic officer in the Health Sciences will best position us for success in the years ahead." The new Health Sciences chief will assume responsibility for School of Medicine finances, a task that UPMCS President Jeffrey Romoff has been handling in his academic role as senior vice chancellor for Health Administration.

* Romoff, in turn, will voluntarily give up his senior vice chancellor position later this summer.

Nordenberg said, "Jeff Romoff has suggested that, in the current environment, both institutions might be better served if he relinquished his position" as senior vice chancellor, Pitt's second-highest paid administrator after Detre. "This would permit him [Romoff] to devote all of his energies to his always demanding and rapidly expanding responsibilities as president of the UPMCS," Nordenberg said.

The chancellor added, "I want to underscore my deep sense of gratitude for all that Jeff has contributed to the University's rise to the top of the ranks in academic medicine." Turning to Romoff, Nordenberg said: "We really could not have done it without you." "I also want to underscore my confidence in his ability to lead the UPMCS in ways that will further the academic mission, and my anticipatory appreciation for what I know will be a highly productive partnership between the two of us in the years ahead," Nordenberg said.

* The soon-to-be-unified faculty practice plan of the School of Medicine will be moved into UPMCS.

Chairpersons of the medical school's clinical departments recommended this move, which Nordenberg said "reflects their belief that, under current market conditions, they will be best positioned to influence the [medical center] system and benefit from its operation if they are an integral part of it."

* Pitt and medical center officials are negotiating a multi-year, renewable contract to ensure a base-line of UPMCS financial support for the Health Sciences schools.

Such support, Nordenberg said, "is essential in that the academic strength of the Health Sciences schools has been a driving force in the rise of the medical center system to world-class status. It also will provide Dr. Detre's successor with the degree of budgetary flexibility that should permit him or her to be an effective and visionary academic leader."

* Pitt will dissolve its University of Pittsburgh Medical Center Division, which has been administering the medical faculty plans. The division also was the entity through which the University paid Romoff and other UPMCS senior managers, and through which the UPMCS president exercised fiscal control over the medical school.

The chancellor told the board that important issues remain to be negotiated. "I suspect that our discussions will continue through the summer and that the complete implementation [of the restructuring] will extend beyond that," he said. He would not specify the issues that remain to be settled. One issue that's not up for discussion is the medical center's use of the words "University of Pittsburgh" in its corporate name, he said. While some professors have called on Pitt to revoke UPMCS's right to use the name, Nordenberg said he opposed such a move.

The chancellor called the restructuring "a formal reflection of a practical division of labor" and a response to changes in the health care market.

University Senate President Gordon MacLeod, public health school professor and former state secretary of health, said the restructuring marks "a sea change" in Pitt-UPMCS relations. "This represents a departure of UPMCS from most direct involvement with the University," MacLeod said. "UPMCS has always been largely independent from Pitt, but now it will be essentially a private operation.

"One of the most important changes that Mark [Nordenberg] announced today is the fact that the approximately $200 million in annual practice plan revenue will now be under the direct control of the UPMCS, which will pay an annual subsidy to the Health Science schools," MacLeod said.

He said the "uncoupling" of UPMCS from Pitt is part of a national trend. A number of universities, including Stanford and George Washington University, have sold their medical centers or have otherwise distanced themselves from those centers in recent years, MacLeod said.

"Changes at the federal level, including changes in health care reimbursement, threaten to have a substantial, negative impact on academic medical centers," he added.

Overall, MacLeod favors the changes. "Health care is now a commercial enterprise, and the University has never been very successful in conducting commercial enterprises," MacLeod said. "This [restructuring] will free the UPMCS to do what it needs to do to compete in the marketplace, while bringing the academic responsibility for medical education more closely under the University's control.

Bruce Steele

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