Traber steps down as Health System CEO

Just five months after being handed the difficult task of saving the Penn Health System from financial ruin, Peter Traber stunned his colleagues yesterday by suddenly resigning to accept a senior research position with one of the nation's leading pharmaceutical companies.

The highly-regarded Traber was appointed to succeed longtime Health System chief executive and Medical School Dean William Kelley in February after University President Judith Rodin fired Kelley following two years of massive budget deficits.

Health System Chief Operating Officer Robert Martin will become the interim CEO of the Health System, while Medical School Deputy Dean Arthur Asbury takes on Traber's academic duties for the present.

The move shocked doctors at the Hospital of the University of Pennsylvania and administrators at College Hall, who said Traber's decision to step down caught them almost completely by surprise.

Traber had expressed great enthusiasm for taking on the job after being appointed first on an interim basis and then as the permanent head of the Health System.

He remained interim dean of the Medical School because the University requires a consultative search process for high-level academic appointments. But many assumed that Traber would eventually receive the post, and Rodin showed no hurry to begin the formality of a search.

In a statement yesterday, Traber said he would leave to take advantage of the "unique opportunity" he had to become the head of clinical pharmacology and experimental medicine at GlaxoSmithKline, the health care company that will result from the merger of SmithKline Beacham and Glaxo Wellcome.

He declined further comment last night.

Doctors at HUP said they were shocked by the decision -- communicated to them over e-mail in separate letters from Traber and Rodin -- and saddened by the departure of the man they thought would be their leader for years to come.

"I'm very disappointed," said Howard Herrmann, the outgoing chairman of the Medical School's Faculty Senate steering committee. "We were all very encouraged by his quick grasp of the needs and problems in the Penn Health System."

Said HUP Senior Medical Director Bernett Johnson, "I think everybody was somewhat shocked. He'd only been in office for about five months, [and] there was a lot of respect for him as an individual, as a leader."

Several doctors said that there was speculation yesterday that perhaps Traber had other reasons for leaving as well.

"People speculated about all sorts of things," said Stanley Goldfarb, who succeeded Traber as chair of the Department of Medicine. "But in the end I think he decided that this was really best for him. I have to take what's been said at face value."

Traber was appointed in the midst of the Health System's financial recovery plan, initiated a year ago under Kelley. It focused on cutting costs through huge layoffs -- 20 percent of UPHS's workforce over the past 14 months -- and conserving resources whenever possible.

In Kelley's final two years in office, UPHS lost nearly $300 million, and saw its mounting losses begin to jeopardize the overall institution's fiscal health. Though exact figures for the just-ended fiscal year won't be available until the fall, officials have indicated in the past that they expect a deficit of around $10 million.

Traber's departure will likely complicate matters as officials contemplate the next step in their effort to improve the Health System's financial performance. In yesterday's statement, Rodin said they are "resolutely focused on achieving better than break-even performance" for the current fiscal year.

Despite dividing Traber's job into two positions for now, Rodin pledged yesterday to find someone who can hold both positions.

"The University is committed to this combined leadership role, and we expect to recruit a national leader to fill it," she said in the statement.

That promise signals that the University is still committed to maintaining an integrated medical school and health system, which was questioned last year.

Asbury, the new interim dean, has been the deputy dean since Traber's appointment. He has served in a variety of roles, including as acting Medical School dean.

Martin had been Kelley's COO towards the end of his tenure. But he resigned shortly after Traber's appointment, apparently to protest the return of the Hunter Group, a health care consulting firm known for recommending unpopular cost-cutting for troubled institutions. He returned when Traber became the permanent CEO and soon ended the company's day-to-day role at Penn.

Martin and Asbury could not be reached for comment yesterday.

Please note All comments are eligible for publication in The Daily Pennsylvanian.