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Albert Einstein was flattered when he learned that Y.U. intended to name its medical school after him. In a 1951 letter to Y.U., Einstein, who was then 72 years old, said: “To my mind, this undertaking is of the greatest importance to American Jewry; it is an act of self-help to make it possible for many of our young people in this country to study medicine.”
When the college opened in the fall of 1955, several months after Einstein’s death, Y.U.’s president, Samuel Belkin, said the school would be “a living monument, erected by American Jewry and the American people, to the memory of one of the greatest men of our era.”
But medical schools are a double-edged sword. The prestigious ones often attract large donors, but they can also be huge drains on finances. Tuition fees never cover the cost of education, and grants cover only a fraction of the costs of research. Instead, most, though not all, medical schools make money by offering clinical services.
More than half of the $79 billion in medical school revenues nationwide in one recent year came from such clinical services, according to a study in the journal Academic Medicine.
In many cases, medical schools operate their own teaching hospitals, providing them with an ongoing clinical services revenue stream. Or in a business model known as a faculty practice plan, salaried faculty members provide medical care at other hospitals, from which the school takes a share.
But Einstein long ago divested itself of its hospital, the Jack D. Weiler Hospital, and its faculty practice plan, both of which were taken over by Montefiore.
Montefiore took over Weiler hospital on a long-term lease more than 40 years ago. A recent report from Moody’s Investor Service, described the hospital’s most recent payment to Y.U., $2 million in fiscal year 2013, as “modest.” Einstein also has affiliation agreements with seven other hospitals. But its most important relationship remains with Montefiore, which with 18,000 employees is the largest employer in the Bronx.
Representatives for Einstein and for Montefiore declined to reveal the terms of their affiliation agreement. But some Y.U. insiders believe that Montefiore has had the better end of the relationship overall.
Most primary academic hospitals such as Montefiore pay their medical schools to support research. But Y.U.’s consultants believe that Einstein has been underpaid, according to a Y.U. faculty member.
The hospital nevertheless continued to feed off the prestige and talent of being associated with Einstein, including co-branding most of its advertisements with Einstein’s logo.
In recent months, Y.U.’s consultants have told faculty they were working on a plan whereby Montefiore would increase its reimbursements to Einstein.
“They’re hopeful those deficits will be at least addressed in some way going forward,” the faculty member said. It seems that by joining the two entities together and ceding control of day-to-day operations of Einstein, Y.U. has found a way of having Montefiore shoulder more of the financial burden.