Hahnemann University Hospital on Wednesday said it plans to transfer the majority of its medical residents and fellows to Tower Health, a six-hospital system that does not have all the accredited training programs it would need to accommodate Hahnemann’s 500-plus residents.
Hahnemann, Tower, and Drexel University, which uses Hahnemann as its main teaching hospital, said in a joint statement that the move was the best option for preserving residents’ training, while reducing the upheaval to their lives set in motion when Hahnemann declared bankruptcy in late June and said it would close in early September.
Under the deal, Tower would pay $7.5 million to take ownership of Hahnemann’s residency and fellowship programs, as well as the 496-bed hospital’s Medicare number, which affects the number of residents for whom the health system would be able to seek federal funding, according to court documents. The federal Medicare program, known mainly for covering seniors and the disabled, also pays for much of the nation’s physician training.
The deal is subject to approval by U.S. Bankruptcy Court, and system leaders said they expect the transfer to be finalized by Aug. 1. Hahnemann and owner American Academic Health System are due in bankruptcy court for their first hearing Thursday.
“We are pleased to have reached an agreement with Tower Health which provides the best opportunity for the residents and fellows to continue training with the Drexel physicians while keeping the training cohort intact and enabling residents and fellows to remain in the greater Philadelphia area,” Joel Freedman, CEO of American Academy Health System, Hahnemann’s parent company, said in a statement.
But it was not clear Wednesday how such a massive shift would work.
An influx of at least 570 new residents and fellows would dwarf Tower’s current resident program, which has 118 doctors-in-training in only five of the 15 specialties with accredited programs at Hahnemann. Tower’s only Philadelphia property is 148-bed Chestnut Hill Hospital; its largest facility is Reading Hospital, with 716 beds in Berks County.
Residents are not obligated to transfer to Tower, and many have accepted positions elsewhere. But before they can transfer, Hahnemann must formally release them and the Medicare funding that subsidizes their training — though Hahnemann hasn’t provided residents with details.
“Everyone is just as confused as they were a day ago, two days ago, a week ago,” said Riken Kumar, 31, who is in the third year of an internal medicine residency at Hahnemann.
The agencies that oversee physician training programs and Medicare have rules about how residents should transfer in the event of a hospital or program closure. But Hahnemann’s closure affects an unprecedented number of medical residents, experts have said.
“I can’t think of an example where a hospital as large as Hahnemann with residents has ever closed or done anything like that,” said Gerard Anderson, a professor of health policy and management at the Johns Hopkins Bloomberg School of Public Health.
Tower has said it would work closely with Drexel, hire as many resident faculty members as possible, and seek an expedited review for any new programs from the Accreditation Council for Graduate Medical Education (ACGME) — a process that typically takes up to a year.
Tower “has the available and diverse education resources through our faculty and in collaboration with Drexel University faculty to ensure continuity of resident and fellow training,” said Jessica Bezler, a spokesperson for Tower, in an email Wednesday morning. The company has more than 1,400 beds in six hospitals stretching from Reading into Philadelphia and Chester County.
Ivy Baer, senior director and regulatory counsel for the Association of American Medical Colleges, said the organization is skeptical of the plan.
“It’s really unclear to me how they would accomplish what they say they would like to accomplish,” Baer said. “Our real concern is that the residents get the type of training they thought they were going to get when they accepted residency at Hahnemann.”
Dozens of teaching hospitals around the country have stepped up, applying to ACGME for a total of about 1,000 positions for Hahnemann residents, the group said.
Training programs can accept more residents than their Medicare cap allows, but they aren’t eligible for Medicare funding for those residents. The exception is that when hospitals accept displaced residents, they can still receive Medicare funding for the transferred residents, even if the hospital has already reached its limit.
The Hospital of the University of Pennsylvania, Thomas Jefferson University Hospital, Temple University Hospital, and Cooper Medical Center have all said they would welcome Hahnemann residents.
In a tumultuous few weeks, residents have scrambled to find their Plan B. Emergency medicine residents thought their program might be transferred to another Philadelphia hospital, but that fell through after Hahnemann and Tower announced their plan, said Christy Johnson, a second-year emergency medicine resident.
“We all thought we’d ultimately have this plan, and everyone who wanted to stay in Philly would be able to stay in Philly,” said Johnson, 29. “Now we don’t have that plan, and there’s a lot more competition for spots in Philly.”
Tower has an emergency medicine residency program, but Johnson said the hospitals are too far from Philadelphia, where she lives. She’s continuing to look for opportunities in the city.
For those who go to Tower, CEO Clint Matthews said, he wants the transition to be “as easy as possible.”
The health system said it would provide free onsite housing at Reading Hospital and free meals at Tower hospitals, among other amenities.
“We are committed to our academic affiliation with Drexel University and providing a high-quality training program for residents and fellows,” Matthews said in a statement.
Drexel University president John Fry said the institution is committed to working with Tower.
“This is a natural next step in the growing relationship between Tower Health and Drexel University, which includes our recently announced 20-year academic affiliation and the initiative to explore combining the Tower Health Medical Group and Drexel University Physicians practices,” Fry said in a statement.
In addition to Reading and Chestnut Hill, the Tower system also includes Pottstown Hospital in Montgomery County, and Brandywine, Jennersville, and Phoenixville Hospitals in Chester County.
Residents in specialties for which Tower lacks accredited training programs, such as anesthesia, said they are not sold on the plan.
“These hospitals don’t have organized residency programs,” said Rosa De La Cruz, an anesthesiology resident from the Dominican Republic. “It was never my plan to go to a community hospital.”
Kumar, the internal medicine resident, has accepted a position at a New Jersey hospital closer to his home in Franklin Park, though he is still waiting on Hahnemann to formally release him.
For over two years, he’s driven more than an hour each way to work at Hahnemann, a hospital he selected for the diversity and excitement a big city could offer, and one that will be hard to say goodbye to.
“We still have our camaraderie, but there’s a side of anger, a side of sadness, in all of us,” he said.
Staff writers Aneri Pattani and Mari A. Schaefer contributed.