Ralph W. Muller has been named chief executive officer of the University of Pennsylvania Health System, effective July 1.

Muller, 57, served from 1986 to 2001 as president and chief executive officer of the University of Chicago Hospitals and Health System. While at Chicago, he brought a virtually bankrupt hospital back to fiscal health and oversaw a major construction campaign that culminated in a new, state-of-the-art ambulatory care center and a new children’s hospital, set to open in 2004.

Muller said that Penn’s Health System had many strengths but still faced challenges. “The programs are very deep, with great breadth and great national distinction. The challenge is that government funding for Medicare and Medicaid, as well as private insurance, is being ratcheted back. Maintaining programmatic strength when funds are being cut back is a challenge for Penn and for other major academic medical centers.

“ We will work with the [Health System] board and the Trustees to see that this happens.”

Muller’s first task upon arrival at the university will be to work along with Medical School Dean Arthur Rubinstein to complete the next five-year strategic plan for the Health System and School of Medicine.