Saturday, July 27, 2019

"Like Watching a Slow Train Crash": AHERF to Hahnemann & Drexel, Part Deux

The Hahnemann Tragedy: Not All That Anechoic, But How Relevant Anyway?

There are so many health policy narratives right now entering new phases: CMS's head slamming the very idea of a public option; prescription drug costs; the opiate crisis now including both the Sacklers and J&D--all repeatedly subjects of this blog. So my dander's up over all these things more than something maybe unique to one town. Personally I'm finding it hard to stop and cone down on something that's for now mainly affected the U.S. Delaware River Valley. Philadelphia in particular.

Which is just the point that Dr. Poses, HCR's intrepid editor, recently made here around the closure of Hahnemann. (Its counterpart, Medical College of Pennsylvania Hospital, was closed by 2004.) Why has this major loss of a local health asset been so anechoic, a term I coined decades ago? Or has it actually been anechoic beyond the DelVal? Dr. Poses has urged me to blog on the Allegheny and Hahnemann debacles and their sequellae. It now occurs to me I can offer a useful extension, if not corrective, to his Part One on the events leading to the present demise of what's often been Philly's hospital and training venue of last resort, Hahnemann University Hospital.

Herewith, Part Deux. I lived through the whole sordid mess as a clinician and educator. I did so before, during, and after the late, unlamented, Allegheny University of the Health Sciences (a branch of Pittsburgh's AHERF) and its most important recent partner, Drexel University College of Medicine (DUCOM). Tellingly, we should call them frenemies, never true and trusted partners despite protestations to the contrary.

(To get ahead of the story only a bit: by the late 1990s, Drexel had inherited the bulk of academic and out-patient assets from Abdelhak's "AHERF East" expansion. Much less has been written or understood about Drexel's role in this narrative.)

So here's a perspective that will, I think, offer at least a little something new for everyone who trudges through it. It runs long.

Back, then, for a moment, to the "anechoic effect." Interestingly, the demise of Allegheny and now that of Hahnemann haven't lacked for echoes. Much has been written--indeed, the literature's so rich I'll only cite the most important milestones here--about it, and attention was fitfully paid nationally. The documentary trail is rich locally. But not only there. Look in peer reviewed widely read world wide including one exhaustive monograph out of a major university press. Or put ["tenet healthcare" hahnemann philadelphia] into a search engine, omitting the square brackets.

In what follows I yield to the impulse to pepper official accounts with my own and colleagues' observations, up to and including some insalubrious details. For some of these there is really nothing to cite. Thus, since I'm peppering, feel free to take my account with a grain of salt. Remind, me, however, to come back to the question: if the story was really not anechoic--let's say at worst hypoechoic--why do folks still not pay attention? Is there something unique about the Philadelphia setting, or are there lessons-learned that can be applied to other's settings?

After all, it wasn't exclusively (to coin a phrase) just The Philadelphia Story. From the outset, it was a statewide story, soon becoming a national story with the 1998 bankruptcy and consequent incursion of Tenet Healthcare, a for-profit out of Texas and California. Also it was always a money story, where "follow the money" goes back way beyond Bob Woodward and Carl Bernstein. Money stories are almost always generalizable. And yet ... I'm still not sure about this one.

All the basic facts of history below are easily checked, when provided for readability sans citation or link, via any good search engine.

Early Days.

Start at two ends of the same state of Pennsylvania, truly a "swing state" in so many ways, long before it joined Wisconsin in tipping the nation into chaos in 2016. By the early 1990s two things were clear. Pittsburgh had the state's most aggressive yet in another sense most defensive health care institution in what became the Allegheny Health, Education and Research Foundation, AHERF. It arose out of both the feared domination of Pitt and the ambition of a group of physicians and administrators led by a pre-AHERF hospital cafeteria director, post-AHERF jailed petroleum pirate, the late Sherif Abdelhak.

Abdelhak was not the only buccaneer involved in the story, though, either before, during, or after the 1998 bankruptcy. The crimes--or, rather, let's be careful, "departures from accepted norms"--of Abdelhak and his immediate Pittsburgh cronies were the worst. To keep his newly-cobbled-together statewide medical school afloat by the mid-90s, he'd already started quietly raiding any number of foundations, gifts, pensions and endowments that had supported worthy activities. (I participated in a class action suit around one of those.) Such activities continued uninterrupted for a while, with only faint rumbles heard early on at the institution Abdelhak had merged into the oddly-styled "MCP♦Hahnemann College of Medicine," and then its immediate progeny AUHS: Allegheny University of the Health Sciences.

AUHS's President Sherif Abdelhak gave the plenary lecture to the Association of American Medical Colleges (AAMC), the Cooper Lecture, in 1996, joining pre-bankruptcy luminaries such as Paul Beeson and Uwe Reinhardt beforehand and (post-bankruptcy) Clayton Christensen or Rita Charon in this prestigious venue. Everyone in 1996 was keen to hear, without cynicism, how he was pulling off his entrepreneurial hat trick. Cynicism came considerably later.

It was never clear to me whether it was AUHS or more broadly AHERF that suddenly and traumatically landed on the auction block in 1998. Long before their merger, both of the predecessor medical schools, Medical College of Pennsylvania and Hahnemann, each with its own wholly-owned non-profit teaching hospital, had been pressured financially and mismanaged. No one was all that surprised that they acceded to merger, even though no one was all that happy about the strange bedfellows that resulted. By the mid-1990s, Philadelphians already knew the city was over-medicalized both clinically and educationally.

The two most salient characteristics of this shotgun marriage were its "T" and "W" on a SWOT quad chart. Do the math: its main strength, such as it was and still the case in Philly real estate circles, was location. The medical schools and hospitals were rather dilapidated then and now. But at least Hahnemann offered a prime location just north of what was to become the Convention Center district. So the "S" was not so amazing despite a few additional clinical assets over the years (assessed at length here and here).

(Ironically, in the books just cited, institutional biographies were commissioned for joint sesquicentennials and both were published hard on the heels of bankruptcy. They reward reading. And yet, from such a reading you'll perhaps come away with the impression: "say what?!? you combined two med schools reeling from such radically different traditions and thought culture clash wouldn't impact the result?)

And there, along with failure to invest, lay a critical weakness. Culture matters. The medical cultures clashed with each other, with the new parent university, and with the business cultures of Tenet and its successor.

In retrospect and probably in prospect, the opportunities for the new medical school and the hospital--what remained Hahnemann University Hospital because subsequent hospital owners wanted to differentiate it from Drexel's academic receivership--were few and far between. That's because the threat, and this is crucial, was something that may in fact be unique to Philadelphia.

Because of its history--and this is a decidedly mixed blessing with certain blandishments that persist pleasantly to this day--Philadelphia was always an over-medicalized place since the onset of its gradual but inexorable post-19th century and -industrial decline. For generations, depending on how you count, it had either five or six medical schools, each with its own elaborate teaching hospital plant, not to mention myriad other smaller hospitals. Encroaching further were suburban hospitals in the 20th century and outpatient surgical centers in the 21st. Each poached lucrative business away not just from Hahnemann but from all the university hospitals. Something had to give, an event now playing out at the bottom of the health-care and -education food chain.

Hahnemann was situated in a location, journalists now observe, with one of the least favorable payer bases of any central Philadelphia hospitals. Only the now-defunct Philadelphia General Hospital over in West Philly, still there as recently as the 1970s along with the Civic Center where Strom Thurmond held forth in 1948, was poorer. (PGH and the Civic Center are now wiped from the face of Google Maps, supplanted by grand edifices built by ever-expanding Penn-affiliated organizations.)

When the bankruptcy hit AHERF, having stripped the former organizations' academic assets, was ill-equipped to attract investment or do much other than give up the ghost. It had essentially been a health care Ponzi Scheme. Below I connect the dots with larger national trends described in a key article published over the name of Penn's university president. But before I do that let me describe some of the highlights, or lowlights, of the early years after AHERF went into receivership.

Brokering a Deal

In 2019 Philadelphia will now "de-medicalize" some more, through the long-overdue shift of the medical school and clinical training facilities to a new east-central Pennsylvania location. But unlike the present circumstance, in the late 1990s it was deemed unacceptable for all those hospital employees and all those jobs and all those patients to lose their places in the Philly firmament.

The politicians swung into action, casting about for some cure for the institutional patient.

Those figures--let's simply name Ed Rendell and Arlen Specter for starters--saved the patient by dismembering it. They'd always go on to say there was no choice, and it's probably true. The inpatient facilities went to an out-of-state, for-profit organization as I already mentioned.  Clinical training and health undergraduate programs (medical and many others) went to Drexel. The serial name changes I described above continued. The jewel in the rather rusty crown, the med school, soon became Drexel University College of Medicine under Constantine Papadakis, the late Greek-born engineer and the university's then-President, .

What followed was a striking litany of unforced errors. Had both Tenet and Drexel not made so many mistakes, it's possible the endgame just might have gone a different way. We'll obviously never know with any certainty.

The Next Chapter: Greek Tragedy

What happened next is at least as important as anything AHERF miscreants did in sealing the fate of both institutions. It was not just Tenet against Drexel. It was also Drexel against Drexel.

It's hard to know which of these sets of conflicts was most consequential in weakening the edifice after the bankruptcy. In either case it's important to understand that there not two but three boards, three administrator-coteries, and three financial silos. Drexel quickly erected a "firewall" between its health schools and its traditional West Philadelphia campus, with disastrous results.

Start with Tenet against Drexel. It's fairly easy to dispose of this conflict, since as Poses points out, ruthless business thinking immediate took hold for Hahnemann University Hospital. Make concessions and collaborate with clinical research planning? Not a chance. Tenet rushed to hive off its information technology out of reach of Drexel, installing an incompatible EHR. Some Tenet lawyer may come after me and berate me for ignoring "how much we at Tenet did for Drexel," but I can assure you and her that on balance, most decisions were made to streamline, not to say strip bare, Hahnemann activities such that Drexel research languished at the Hahnemann campus. Ironically it was only hold-overs from certain AHERF-era grants such as the tobacco settlements and the Robert Wood Johnson Foundation that helped tide medical school departments over, at least for a while.

We come, then, to "Drexel versus Drexel." In some ways these conflicts were even more pernicious. The firewall between the two sides of the river promoted such a trend. After all, mimicking the sins of the Tenet fathers, the two Drexel "silos" themselves rushed to hive off their own IT groups one from the other. (This has since been reversed, a healthy dose of too-little-too-late.) Not without some justification, the Drexel "original" board was paranoid that Drexel Med would bring down its new foster-parent institution.

And foster child is what Drexel Med, and for a while its corollary health schools, became. Papadakis, the engineer-entrepreneur, had already made his main focus the dilapidated West Philly campus. So he emphasized physical development over everything else, neglecting even his own West Philadelphia faculty almost as much as that of the medical school. With one or two notable exceptions he hired poor administrators. One of them, an early medical school dean, mimicked Abdelhak by embarking on a relationship with a medical student. (Abdelhak's now-physician wife later divorced him. It seems uninteresting what happened to the medical dean and the weather girl-turned-med-student who went on to become his wife.) Ironically, the best administrators at Drexel Med were those already present when Drexel took over. But not many stayed on to help.

Hence, Drexel versus Drexel. Drexel Main Campus mimicked AHERF in many ways in looting the medical school, taxing it heavily. Perhaps the worst example of this, a truly damaging sort of virtual taxation, was Papadakis running roughshod over the internal processes of the struggling DUCOM. At one critical juncture, he required an estimable new dean, who'd followed the fine gentleman described above, to eliminate all searches for replacement department chairs, as their predecessors headed for the exits. He froze all the acting chairs in place, resulting in a further weakening of the administrative infrastructure. This should have been a quitting issue for many--but most had already booked because of Abdelhak and his earlier regime. And indeed soon thereafter that new dean, Richard Homan, who'd just had every single one of his chair searches shot out from under him, did leave for a much better deanship elsewhere.

The remaining departmental structures were, and even now remain, riddled with inadequacies and opportunities for outright fraud. Last time I checked, about six months to a year ago, heads were still rolling as a result. Over on the Main Campus there is a new president who, while an improvement over Papadakis, focuses on new buildings, which, of course, attract new money.

Echoes Are Heard

In 2004, at the end of a decade at the University of Pennsylvania during which she had her own battles with the health-school leaderships, its scientist-president Judith Rodin published an influential piece in AAMC's widely-read flagship publication, Academic Medicine. Giving credit where due, it was "contributed to" and likely co-authored or first-drafted by philosopher administrator Stephen Steinberg, to whom Rodin gave brief thanks in a footnote. Without once mentioning Allegheny it was a far-seeing autopsy of much that was going wrong in American medicine, typified--I know this from talking to Steinberg--by Allegheny, down to that moment when Rodin left Penn to head up the Rockefeller Foundation. It's worth re-reviewing now, fifteen years later.

Rodin and Steinberg noted how they'd seen the "terrifying perils of the vertically integrated academic health system, ... the University of Pennsylvania's newly created integrated health system [and] how dramatic shifts in federal policies and market forces threatened to take down our health system—and the rest of the university with it." She adverted to how, just
... as Penn led the way in the creation of the nation's first vertically integrated health system in 1993, so, too, were we among the first to feel the full effects of dramatically increased insurance claim denials and delays, and reduced Medicare payments, both overall and for medical education, that followed in the wake of the Balanced Budget Act of 1997. At the same time, we were providing $100-million per year in unreimbursed or underreimbursed indigent hospital care. As a result, the University of Pennsylvania Health System lost $350 million from 1997 to 2000, created $800 million in debt, and its bond rating was downgraded by Moody's Investors Services from Aa3 to A1, while the outlook for the university's higher AA rating was changed from “stable” to “negative.”

So the times were tough all up and down the food chain.

Rodin and Steinberg went on to prescribe Penn's "cure," not as novel as she implied but still emerging from an abyss hence now able to prescribe a "sow's-ear-to-silk-purse" transformation.
At that point, we faced the same fundamental choices as many of our peers: risk serious financial and educational damage to the rest of the university by continuing to absorb the Health System's deficits; eliminate the threat to the university's financial health by spinning off, selling, or otherwise separating the Health System from the university; or strategically plan and manage our way out of the financial crisis, and do so in a way that would make us less vulnerable to future potential perturbations.... [We] had to consider two separate—but ultimately related—questions. First, why were we in the business of integrated academic medicine, and why on earth would we want to stay in it, given the—by then obvious—risks? Second, if we were going to stay in it, how would we make it work, for our patients, for our faculty, and for our students, and—both academically and financially—for the university as an institution? Ironically, the answer to both questions was more and better integration—just the strategy that got us into so much trouble—but applied very differently this time. Applied more horizontally, and less vertically.

In other words, "we zig when they zag." But of course, Drexel, like other local schools (notably Jefferson, still today expanding with the absorption of Philadelphia University) was trying its damndest to do the same thing. At least Drexel was claiming to try to integrate, undertaking steps including adding schools of law and business and reintegrating information technology. So it boils down I think to "how rich were you when you started," and "how many unforced errors"? Winners get to write the history. Those at the bottom of the food chain, if they drop off, don't get to. No surprises here. Drexel (and others) were trying to integrate "horizontally." But with a lot less money, a lot less reputation, and no real cushion.

Next, in 2011, an eminent sociologist-historian, the late Judith Swazey, published a lengthy history of the Allegheny-Hahnemann disaster. In Merger Games, Swazey, per one reviewer
vividly document[ed] fundamental patterns inherent in practically all corporate reorganizations and mergers, and dissects why they succeed or fail. Because of these highly important and ever so timely lessons, the information in this book should ... reach the widest possible audience and to that end it should be made into a movie. It has all the ingredients of a terrific box office success. [Editorial note: not!!!] And at the same time it should be made into a Harvard Business School case study because these lessons ... need to be understood by tomorrow's organizational leaders.

In another way, of course, Swazey's reception, or lack thereof, may prove Poses's point. People don't pay much attention. Why?  Perhaps just simple hubris. They avert their eyes if there's the least rationale to do so, a plight now afflicting our entire country. It may have been just too easy, too glib to think of Philadelphia as overmedicalized, someone needing to drop off the rotten bottom of the food chain, bad managers making it worse--God knows they did!--and free-standing schools of health having little ballast during times of economic stress. In any case another reviewer, one who lived through it as I did, long before Hahnemann died went onto the Amazon website and described the experience in terms of "watching a slow train crash."

Impact on Patients

Well, not just the patients. Consider faculty members, many of whom have devoted decades to teaching subjects like anatomy or admitting to Hahnemann and accumulating significant coteries of devoted patients. Those patients aren't going to follow some fine physicians, or the ones who elect to migrate, out to Berks County, Pennsylvania.

Just yesterday I spoke to someone knowledgeable about the impact on the area's preeminent medical school, Penn, in terms of eye patients. This individual described to me a tripling of the numbers of patients appearing at the walk-in clinic, in almost overnight fashion. Imagine having to deal suddenly with three times the number of emergency walk-ins, triage them, get them to appropriate consultants. In time the impact will likely be diffused and absorbed, just as happened two generations ago with the  1977 closure of Philadelphia General Hospital. Nothing entirely new here. And yet, to say "move on, folks, nothing to see here," as some might be tempted to do, would be a shame.


In this account I've added some textural detail to the knock-on effects of the Allegheny bankruptcy. It's rich with irony. So many questions about what I have included actually remain unanswered. To what extent were Drexel administrators complicit with those from Tenet in insuring the slow steady decline of the involved institutions.

One thing is certain. Only in the past year and a half to two years, give or take, have some of the errors been addressed. For example, a clever strategy was only recently put into effect to undo the effects of Drexel's freeze on the hiring of department chairs based on real searches for quality. A number of chairs, some well meaning but most less than fully adequate, have finally been pushed out. Just in time for Drexel Med to move to another part of Pennsylvania, and for the heirs of its hospitals to give up the ghost entirely.

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