Two months into his tenure as chief executive officer of the West Penn Allegheny Health System, Dr. Christopher Olivia is halting certain expenditures, shaking up his executive staff and hiring consultants to help with a long-promised consolidation of services and departments.

The changes are the first evidence of Dr. Olivia's plan for the region's second-largest health system.

He inherited an organization still in the midst of a financial recovery that began with the merger of Allegheny General Hospital and The Western Pennsylvania Hospital in 2000. The system turned a $12 million net profit in the first nine months of fiscal 2008, up $2.7 million from the same year-ago period, but it incurred an operating loss of $15.6 million, compared with last year's operating loss of $10.1 million for the nine-month period. It also has placed a "temporary hold" on new capital spending so it can re-evaluate and redesign its approval process, according to a document distributed to West Penn Allegheny bondholders.

The biggest of the personnel moves announced yesterday involved James Rosenberg, chief operating officer and executive vice president of hospital operations. His position has been eliminated, and Mr. Rosenberg is scheduled to leave the organization today. Mr. Rosenberg was paid $611,074 in fiscal 2007, according to a recent filing with the Internal Revenue Service. His "duties were highly focused on our individual hospital operations," Dr. Olivia said in a message to employees yesterday, "and we need to move toward a leadership model that supports physician-driven, service-line development across the system."

The new position of executive vice president and chief administrative officer will be filled by Roy Santarella, currently chief financial officer at Crozer-Keystone Health System in the Philadelphia area. Mr. Santarella, who is scheduled to start July 31, also will hold the title of acting chief financial officer. He will report directly to Dr. Olivia.

Another new addition is Janice James, who will assume the interim post of acting chief integration officer. Ms. James is a managing director of Wellspring Partners, a health-care consultancy and a unit of Chicago-based Huron Consulting Group. Dr. Olivia also has hired Wellspring for an assessment of West Penn Allegheny's hospital operations.

Ms. James will work with the presidents of Allegheny General Hospital and The Western Pennsylvania Hospital (the system's two flagships) as they try to consolidate programs and departments in an attempt to compete more effectively with rival University of Pittsburgh Medical Center.

Dr. Olivia also has hired The Bard Group in Needham, Mass., to work with physicians during the integration process. Bard describes itself as a "physician-led consulting firm that specializes in the working relationships between physicians and the organizations with whom they partner."

One internal promotion recently approved by Dr. Olivia was the elevation of general counsel Judy Hlafcsak from vice president to executive vice president. Due to depart at the end of June is Cindy Schamp, president of the Alle-Kiski Medical Center, who resigned to become president of the Baylor Medical Center in Irving, Texas.

Dr. Olivia arrived in late March from a hospital in New Jersey. His hiring was one of several personnel changes following last summer's departure of system CEO Jerry Fedele, who left amid internal disagreements about the systemwide integration. Mr. Fedele collected $861,158 in compensation in fiscal 2007.