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TALE OF THE HAHNEMANN BANKRUPTCY SUMMER OF 2019 TESTED OUR PATIENCE, ENDURANCE By Sharon Griswold, MD, MPH Previously Printed in Philadelphia County Medical Society’s Philadelphia Medicine, Fall 2021
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 education a disaster to date.
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 The two-year anniversary of Hahnemann University Hospital’s Graduates (ECFMG) stepped up to advocate for the physicians in cataclysmic closure is upon us. Within weeks of the hospital bank- training (though most weren’t even members of these organizations). ruptcy announcement, thousands of patients were left to scavenge for The trainees’ careers were jeopardized by Hahnemann’s owners either care elsewhere. Hundreds of physicians in training were “orphaned” because of a negligent due diligence process, at best, or a cost-saving or forcibly displaced from their training programs at Hahnemann ploy at worst. University Hospital. Hahnemann’s demise has been featured in The New Yorker.1 Several articles were published in Academic Medicine 2-7 As Dr. Pinsky of the ECGMG stated, “with any other hospital and I wrote an article for Health Affairs.8 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 Background and ethical dilemmas associated with the rapidly changing U.S. health 5 On June 30, 2019, the private equity company, Philadelphia care environment. If regulators and policy makers do not disincenAcademic Health System LLC (PAHS), and its wholly-owned tivize exploitation in health care, by making substantive change, a Graduate medical education is the additional training required of physicians after medical school to prepare for specialization in a field of medicine. 2 0 C H E S T E R C O U N T Y M e d i c i n e | FA L L 2 0 2 1
