Pittsburgh medical school plans postponed

Temple’s planned Pittsburgh medical school is on hold due to a financial loss.

After a $51.8 million loss during the last fiscal year, West Penn Allegheny Health System’s proposed medical school in Pittsburgh, a partnership with Temple University School of Medicine, is on hold.

WPAHS pulled out of the project due to a dramatic loss in revenue, worsened by a stalled merger with Highmark, Inc., a Pittsburgh-based health insurance provider.

As per the affiliate agreement announced on Nov. 1, 2011, Highmark is prepared to give WPAHS up to $475 million to reopen emergency services at West Penn Hospital in Bloomfield and improve patient care at Forbes Regional Hospital inMonroeville.

The agreement was sent to the Pennsylvania Insurance Department, the Pennsylvania Attorney General and the Internal Revenue Service for approval, but Highmark and WPAHS have not yet heard from the state. Subsequently, WPAHS announced it would delay opening the medical school until regulators recognize the transaction.

“West Penn Allegheny made the decision to delay it and Temple School of Medicine understood that decision,” Kelly Sorice, vice president of public relations and internal communications at WPAHS, said. “We had assumed the agreements would be approved by now. That has not happened.”

Sorice attributed declining revenue to an underperforming fiscal strategy adopted in the hopes that Highmark’s contributions would go through.

“Our losses have been accumulating over the years…the strategy was not as successful as we had hoped,” Sorice said. “That’s why we’re very excited for this agreement with Highmark.”

In addition to funding for hospital facilities, Highmark gave $100 million to WPAHS on Nov. 1, half in a grant, and half in an unsecured loan, according to the Pittsburgh Post-Gazette.

“Right now, everything’s a bit in flux. There’s not really much anybody can say except that all processes are currently on go but a year delayed…we don’t expect anything to be different except the time,” Dr. Richard Kozera, TUSM executive associate dean, said in a voicemail.

Larry Kaiser, new senior executive vice president for health sciences, dean of the School of Medicine and CEO of the TUHS, told The Temple News in July that the Pittsburgh campus will improve the shortage of physicians in Western Pennsylvania.

“It offers some alternative to the University of Pittsburgh, which takes most of its students from out of state,” Kaiser said. “Our commitment is to take a significant number of students from in state.”

The campus was planned to be completed by 2013.

Thirty students were to be admitted for the first class, and on Nov. 2, 2011, a job description for faculty at the campus was posted online.

Amelia Brust can be reached at abrust@temple.edu.