If there were ever a time for the Philadelphia region to prove its mettle as a center for medical education, this is it.

The impending closure of Hahnemann University Hospital is forcing about 570 residents who work at the Center City institution to find a new place to continue their training. Slated to close by early September, the hospital is already seeing a rapidly dwindling number of inpatients.

“For sure, there are going to be people who are left out,” said Willaim Sierraalta, 30, who moved here from Chicago three weeks ago to start his residency in surgery. “Less than a week after our official start date, they said the hospital will close.”

Sierraalta is one of 40 residents in surgery at Hahnemann. “We were supposed to be partners. Now we are competitors,” he said Thursday.

Hahnemann’s closure is causing “the largest orphaning of medical residents in the history of the United States,” Drexel University said in a Philadelphia Court of Common Pleas lawsuit against Hahnemann and its corporate parents. Drexel handles the educational side of Hahnemann’s residency programs.

Before residents can move to new programs, officials at Hahnemann, which employs the residents and receives about $100,000 in annual reimbursement from the federal government for each resident’s training, must release them. As of Wednesday, that had not started happening, a program director at Hahnemann said.

A spokesman for Hahnemann said the company couldn’t yet say when the residents and the money attached to them would be released.

Meanwhile, other health systems in the region are trying to figure out how many of Hahnemann’s residents they can accommodate. Residency slots are capped by the Centers for Medicare and Medicaid Services, which supplies the money to pay residents, but temporary increases can be granted in the case of a closure.

“We have been actively involved, as well, in trying to place residents and making it known that spots are available,” said Larry Kaiser, president and chief executive of Temple University Health System.

Hahnemann’s closure, announced June 26, blindsided the trainees, especially those such as Sierraalta, who just arrived in the city to start the training.

In April, after Hahnemann’s financial troubles became widely known and its parent, Philadelphia Academic Health System LLC, cut 175 jobs, warning that the hospital could close if financial help didn’t arrive, the company sent a letter to incoming residents, telling them not to worry and that they would not be affected, Sierraalta said.

But from there, things only got worse as an attempt to sell the hospital to Drexel failed, and no other help arrived.

Drexel’s Philadelphia lawsuit, filed June 21, was an attempt to prevent an abrupt closure. Since then, the corporate owner of Hahnemann and St. Christopher’s Hospital for Children, led by California investment banker Joel Freedman, has filed for bankruptcy protection. Freedman bought the hospitals in January 2018 from Tenet Healthcare Corp. for $170 million.

In a filing in bankruptcy court Tuesday, Drexel said Hahnemann and its corporate parents were “unilaterally communicating with other institutions for the transfer of the approximately 570 participants in Drexel’s residency programs.” At the same time, some of Drexel’s department chairs are negotiating with other hospitals to move entire residency programs to new locations.

One of Freedman’s strategies for improving the finances at Hahnemann, which serves a large number of poor patients, had been reducing the size of the training program, he said in an April interview. But now the program is going away completely.

Separately, the Pennsylvania Department of Health has appointed a temporary manager, R. Kyle Kramer of Pinnacle Healthcare Consulting, to oversee the closure of Hahnemann, as well as the continuing operations at St. Christopher’s Hospital for Children. No one at the state agency remembers doing that in at least 20 years, a spokesman said.

The residents’ future is out of Kramer’s purview.

‘Extraordinary circumstances’

The Accreditation Council for Graduate Medical Education, which oversees residency and other physician training programs, last week invoked its Extraordinary Circumstances Policy, which provides guidelines for residents and fellows to move to other programs.

Under those provisions, hospitals may tap Hahnemann residents for unfilled positions or ask for an increase in the caps on their residency programs. In addition to Hahnemann releasing residents, the accreditation group also has to approve transfers. It said Tuesday that more than 500 available positions had been cataloged.

Thomas Jefferson University, Cooper University Health Care, and the University of Pennsylvania Health System are among the Philadelphia-area academic medical centers that are reaching out to the soon-to-be-displaced Hahnemann residents. All three have set up websites, inviting Hahnemann residents to apply for positions.

Jefferson’s website is accepting applications for potential training opportunities not just at Jefferson Health, but also at Christiana Care Health System, Einstein Healthcare Network, and Mainline Health. The site had collected applications from more than 500 people as of Wednesday, Jefferson said.

Cooper’s website says it will respond to residents within 24 hours and has scheduled an open house on Monday for potential Hahnemann transfers.

“Despite this unsettling setback, rest assured, with the national outcry of support, each of you will land on your feet and find a suitable training program," Cooper said.

Sierraalta, who said he and his wife spent $10,000 on their move to Philadelphia, wishes that were true. “Hopefully, more positions will be opened to let us in,” he said.

Editor’s note: The story was updated at 3:45 p.m. on Thursday (07/04) to include the views of a Hahnemann resident.