Integration Update

Hospital 'Separating' From University

Jefferson takes another step forward in the formation of Jefferson Health System ­p; a new integrated healthcare delivery system ­p; when Jefferson Hospital formally "separates" from the University corporate structure and becomes a new corporation called "Thomas Jefferson University Hospital, Inc. (TJUH, Inc.), with Thomas J. Lewis, as its chief executive officer."

For years, the hospital had been a division of the University corporation, "Thomas Jefferson University," an entity that will continue.

Creating the new Hospital corporation, which required approval by the Internal Revenue Service, is in keeping with the partnership agreements between Jefferson and Main Line Health System that formed the Jefferson Health System (JHS) a few months ago, explains Lori McLauglin, Esq., assistant counsel, Office of University Counsel, who is coordinating legal and administrative responsibilities.

Formally adding the hospital, or TJUH, Inc., to JHS will help the hospital compete in the marketplace. Positioning Jefferson as part of a system with other service providers who collectively treat significantly larger numbers of patients enables all members to benefit, explains Ms. McLaughlin. The hospitals of the Main Line Health System: The Bryn Mawr Hospital, Bryn Mawr Rehab, The Lankenau Hospital, Paoli Memorial Hospital and Community Health Affiliates, join Thomas Jefferson University Hospital, Inc. as JHS members.

In addition to obtaining IRS approval of TJUH, Inc. as a new nonprofit corporation, Jefferson administrators have confirmed that the bond rating of the University corporation has remained the same. Both Moody's Investors Services and Standard & Poor's continue Jefferson's very high ratings.

Ms. McLaughlin describes the hospital separation as purely an "operational and consent phase" in the creation of Jefferson Health System, pointing out that all governance agreements previously made ­p; academic, transfer and operating, system affiliation and lease agreements ­p; will remain the same.

"It was a complex and time-consuming task for the hospital to separate from the University," she adds.

That time involved carrying out numerous responsibilities and tasks by many employees from several Jefferson departments, especially finance, controller's office, hospital finance and administration, information systems, accounts payable, purchasing, human resources and the University Counsel's office.

For the past few months, Ms. McLauglin has coordinated the effort, with help of the Phase II Implementation Committee composed of senior managers: John P. Sullivan, associate vice president for human resources; Michael J. Curran, CPA, associate vice president and controller; David L. Dobbins, CPA, MBA, associate vice president for physical resources; Mark L. Richards, CPA, MBA, associate executive hospital director for financial affairs; Susan Milner, director of space development for patient programs, and Al Giacomucci, acting director, information systems. John Hoffler, manager, systems support, controller's office, has provided technical assistance.

Note: For administrative reasons, hospital employees will be "leased" to TJUH, Inc. until July 1. After then, their paychecks will read "Thomas Jefferson University Hospital, Inc.," their new employer.