Hunter Group's medicine may be hard to take

The Penn Health System hired the firm, known for its dramatic cost-cutting recommendations, this summer. They're the doctor's doctor, the ones whose medication may be effective, but is never easy to swallow. They are the Hunter Group, a Florida-based consulting firm that specializes in helping financially troubled hospitals better manage their resources, and they were hired this summer by the University of Pennsylvania Health System to remedy an deepening fiscal crisis. Composed of senior health care executives and clinicians, the Hunter Group has been charged with finding ways to cut the Health System's budget wherever possible and increase its revenues. Its final report, likely to come next month, may recommend radical changes to UPHS's management team and the way in which the system does business. The Hunter Group has a reputation for dramatic cost-cutting recommendations. Hired in July, the Hunter Group has spent the past two months brainstorming money-saving and revenue-enhancing measures for the Health System. The firm has presented Health System administrators with personnel data and financial information from comparable institutions to help gauge how similar hospitals use their resources. The Hunter Group's arrival has provoked anxiety among UPHS employees who feel their jobs might be in the balance. Health System Chief Executive Officer William Kelley has written several letters to employees explaining the necessity of having an objective observer find ways to reduce expenditures. "[The Hunter Group has been] very helpful to us in identifying costs we can reduce while we maintain outstanding quality," Kelley said last week. The Hunter Group will take at least another month to examine the hospital's departments -- ranging from radiology to food services -- in order to determine which ones are over-staffed and which ones can function sufficiently with fewer employees. "I don't think any department is immune from scrutiny here," Health System spokesperson Lori Doyle said. The Health System is expected to post a loss of more than $150 million for the fiscal year that ended in June. Kelley has pledged to balance the system's budget by the end of this fiscal year. The members of the Hunter Group have conducted regular interviews with a wide variety of Health System employees. They have also worked with three Health System committees of top UPHS executives, select physicians and other lower-level administrators. After about seven weeks on campus, the Hunter Group has already made its presence felt. In response to an initial suggestion made by the firm, Kelley announced last week that there would soon be a series of potentially massive layoffs that could affect each of the Health System's four wholly owned hospitals. "I think that there's a lot of anxiety and almost a sense of purpose that we really have to do this," said Medical School Professor Stanley Goldfarb, who sits on a committee working with the Hunter Group. Besides the flagship Hospital of the University of Pennsylvania, the $2 billion Health System also owns Pennsylvania Hospital, Phoenixville Hospital and Presbyterian Medical Center and is affiliated with several others. It also controls an extensive network of primary-care physician practices. Members of the 14-member Physician Advisory Work Group said the firm is discussing ways that patients can move through the hospitals quicker, enabling the hospital to see more patients and increase its revenue. The firm also wants to do whatever possible to avoid large-scale layoffs, committee members said. "I don't think they're sitting here saying, 'OK, we're going to cut this person's job and that person's job,'" Goldfarb said. Still, it is the consulting firm's often Draconian cost-cutting measures at hospitals across the country -- including the University of California at San Diego, George Washington University and Northwestern Medical Center -- that have earned the Hunter Group its reputation and have also provoked anger among health care employees. Last spring, for example, the Hunter Group recommended that the Detroit Medical Center eliminate 2,000 positions. In May, Hunter Group executives even assumed temporary command of the system in order to provide new leadership. And at the UCSF Stanford Health Services this summer, a group of 200 union workers protested the involvement of the Hunter Group in the hospital's affairs. Daily Pennsylvanian staff writer Naomi Blivaiss contributed to this article.

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