Philadelphia Medicine Fall 2021 - 14

FEATURE
philamedsoc .org
TALE OF THE
HAHNEMANN BANKRUPTCY
SUMMER OF 2019 TESTED OUR PATIENCE,
ENDURANCE
By Dr. Sharon Griswold
T
he summer of 2019 seemed like the orchestra scene of James
Cameron's " Titanic. " I felt like the violinist trying my best
to preserve calm and dignity as we endured the inevitable.
As many in the region know, Hahnemann University Hospital
(Hahnemann) had been a clinical patient care hub affiliated with
different academic centers in Philadelphia since 1848. Hahnemann's
heritage was significant. Over time, it evolved into a safety net
institution for the underserved.
One in 72 physicians currently practicing in the United States
graduated from or trained within Drexel University or its legacy
schools: Hahnemann University Hospital and the (Women's) Medical
College of Pennsylvania. Hahnemann had influence on health care in
the area for generations. It will now be remembered as the epicenter
of the largest graduate medical educationa
disaster to date.
The two-year anniversary of Hahnemann University Hospital's
cataclysmic closure is upon us. Within weeks of the hospital bankruptcy
announcement, thousands of patients were left to scavenge for
care elsewhere. Hundreds of physicians in training were " orphaned "
or forcibly displaced from their training programs at Hahnemann
University Hospital. Hahnemann's demise has been featured in The
New Yorker.1
Several articles were published in Academic Medicine2-7
and I wrote an article for Health Affairs.8
Background
On June 30, 2019, the private equity company, Philadelphia
Academic Health System LLC (PAHS), and its wholly-owned
a
14 Philadelphia Medicine : Fall 2021
subsidiaries filed for Chapter 11 bankruptcy protection in the United
States Bankruptcy Court for the District of Delaware. At the time of
original purchase, the assets of Hahnemann were split into different
corporate entities in a deliberate and calculated process. The entities
had many different names, including Center City Healthcare LLC,
American Academic Health System, the Debtors as referenced in
bankruptcy filings, and others.
Asset splitting is a common practice in private equity acquisitions,
in part, to shield liability. Hahnemann and multiple other subsidies
with placeholder names filed for bankruptcy with billions of unpaid
debts and the owner retaining the Center City property footprint
for future sale.
Thankfully, the Philadelphia County Medical Society (PCMS),
Pennsylvania Medical Society (PAMED), American Medical Association
(AMA) and the Educational Commission for Foreign Medical
Graduates (ECFMG) stepped up to advocate for the physicians in
training (though most weren't even members of these organizations).
The trainees' careers were jeopardized by Hahnemann's owners either
because of a negligent due diligence process, at best, or a cost-saving
ploy at worst.
As Dr. Pinsky of the ECGMG stated, " with any other hospital
bankruptcy or closure in history, the well-being of the physician
trainees was always a priority of the institution. This was not the
case with Hahnemann's closure. " The disastrous loss of Hahnemann
illustrates the story of many injustices and is emblematic of the moral
and ethical dilemmas associated with the rapidly changing U.S. health
care environment.5
If regulators and policy makers do not disincentivize
exploitation in health care, by making substantive change, history
Graduate medical education is the additional training required of physicians
after medical school to prepare for specialization in a field of medicine.
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Philadelphia Medicine Fall 2021

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https://www.nxtbook.com/hoffmann/PCMS_Philadelphia_Medicine/PhiladelphiaMedicine_Fall2021
https://www.nxtbook.com/hoffmann/PCMS_Philadelphia_Medicine/PhiladelphiaMedicine_Summer2021
https://www.nxtbook.com/hoffmann/PCMS_Philadelphia_Medicine/PhiladelphiaMedicineWinterSpring2021
https://www.nxtbook.com/hoffmann/PCMS_Philadelphia_Medicine/PhiladelphiaMedicine_Fallr2020
https://www.nxtbook.com/hoffmann/PCMS_Philadelphia_Medicine/PhiladelphiaMedicine_Summer2020
https://www.nxtbook.com/hoffmann/PCMS_Philadelphia_Medicine/PhiladelphiaMedicine_Spring2020
https://www.nxtbook.com/hoffmann/PCMS_Philadelphia_Medicine/PhiladelphiaMedicineFallWinter2019
https://www.nxtbook.com/hoffmann/PCMS_Philadelphia_Medicine/PhiladelphiaMedicine_Summer2019
https://www.nxtbook.com/hoffmann/PCMS_Philadelphia_Medicine/PhiladelphiaMedicine_Spring2019
https://www.nxtbook.com/hoffmann/PCMS_Philadelphia_Medicine/PhiladelphiaMedicine_Winter2019
https://www.nxtbook.com/hoffmann/PCMS_Philadelphia_Medicine/PhiladelphiaMedicine_Fall2018
https://www.nxtbook.com/hoffmann/PCMS_Philadelphia_Medicine/PhiladelphiaMedicine_Summer2018
https://www.nxtbook.com/hoffmann/PCMS_Philadelphia_Medicine/PhiladelphiaMedicine_Spring2018
https://www.nxtbook.com/hoffmann/PCMS_Philadelphia_Medicine/PhiladelphiaMedicine_Winter2017x
https://www.nxtbook.com/hoffmann/PCMS_Philadelphia_Medicine/PhiladelphiaMedicine_Fall2017
https://www.nxtbook.com/hoffmann/PCMS_Philadelphia_Medicine/PhiladelphiaMedicine_Summer2017
https://www.nxtbook.com/hoffmann/PCMS_Philadelphia_Medicine/PCMS_Philadelphia_Medicine_Spring2017
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