Penn State Geisinger Health System is tightening its belt and preparing for staff reductions later this year.
The 2-year-old system, created by the merger of Penn State Hershey Medical Center and Geisinger Health System, is facing continuing tough financial times.
Stuart Heydt, M.D., the lame-duck president and chief executive officer of the three-hospital system based in Harrisburg, Pa., estimated it will report a $25 million operating loss in fiscal 1999 ended June 30, up from a $21 million loss the previous year. Audited figures are expected later this month.
As part of a cost-cutting campaign, the system expects to reduce staff by several hundred positions later this year to offset operating losses.
"We must intervene immediately to avoid a projected trajectory that could result in as much as a $135 million operating loss within three years," Heydt said. "We need to improve our financial base between $150 million and $200 million within three years. By November we expect to make a $35 million to $55 million impact."
Heydt, 59, said late last month that he is quitting his post but did not say when. Heydt was CEO at Geisinger when it merged with Penn State Hershey Medical Center in 1997. Meanwhile, former Hershey CEO C. McCollister Evarts, M.D., 68, will retire in June 2000 as Geisinger's senior vice president and dean of the College of Medicine. He stepped down from his system post on Sept. 30. No successors have been designated.
