Larry Kaiser, a former chairman of surgery at the University of Pennsylvania Health System, will run the Temple University Health System and School of Medicine, the university announced Monday.

Kaiser, 58, is president and chairman of the University of Texas Health Science Center at Houston. Its six schools have a $900 million budget.

He will start in Philadelphia by April 1.

Kaiser replaces Edmond F. Notebaert, who came to Temple in November 2008 from the University of Maryland Medical System. His announcement last summer that he planned to leave came two months after a long strike with the North Philadelphia health system's nurses and allied health professionals. He will stay on the job until Feb. 28.

Notebaert presided over budget cuts and the unpopular closing of Northeastern Hospital.

Kaiser also will become dean of the medical school, a job held by John Daly. Daly announced last year that he planned to return to the faculty later this year.

Kaiser said he saw the Temple job as an "outstanding opportunity." He said the money-losing health system would have to look at improving efficiency and productivity. "We've got to do more and do it better with less," he said.

Temple, he said, must juggle its role as a community hospital for North Philadelphia with its ability to provide highly specialized care that can attract better-paying customers from across the region.

"If you've got the right doctors, which we think we have, people will want to come there," he said.

The system includes Temple University and Jeanes Hospitals and the Episcopal Campus, which houses psychiatric services. It has 8,000 employees and 920 hospital beds. The annual budget is more than $1.2 billion for the health system and $300 million for the medical school and physician practice plan.

According to financial documents filed with the Municipal Securities Rulemaking Board, the system lost almost $35 million from operations in the fiscal year ended June 30, 2010. That was an improvement from 2009, which was $53 million in the red.

The system relies heavily on government insurers, which tend to pay less than private companies. Medicaid accounted for 44 percent of payments in 2010 and Medicare for 36 percent.

Kaiser was at Penn from 1991 to 2008. While there, he was chief of general-thoracic surgery, founder and director of the lung-transplant program and director of the Center for Lung Cancers and Related Disorders.

He has maintained a limited surgical practice in Texas and plans to do that here, too.

He was not able to sell his house in Bryn Mawr during the stint in Texas and has been commuting home to his family, which includes a 5-year-old son and three school-age stepchildren, on weekends.

Contact staff writer Stacey Burling at 215-854-4944 or sburling@phillynews.com.