Addressing the growing impact of private equity on residency training

Addressing the growing impact of private equity on residency training

The role of private equity has increased significantly in recent years, and the consequences of this change are negatively affecting higher medical education, according to a report by the AMA Council on Medical Education whose recommendations were adopted at the meeting. acting AMA 2022 in Honolulu.

The 2019 closure of Hahnemann University Hospital in Philadelphia is a stark example of the potential adverse consequences. The for-profit-owned shutdown has temporarily left nearly 600 medical residents and fellow doctors without an accredited graduate medical education (GME) program to continue their training. From 2015 to 2019, the number of investor-owned, for-profit community hospitals in the United States grew 19% to more than 1,200 hospitals, according to the AMA’s board report.

Additionally, private ownership of teaching hospitals may affect the ability of residents and fellows to qualify for the Public Service Loan Forgiveness Program (PSLF), which is limited to nonprofit and public entities.

In an effort to address the potential pitfalls of private ownership of GME institutions, the AMA House of Delegates has adopted a new policy to:

  • Affirm that the academic mission of a medical education training institution or program should not be compromised by a clinical training site’s fiduciary responsibilities to an outside business or for-profit entity.
  • Support independent, publicly funded research on the impact of private equity on higher medical education.

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“While positive developments have been made to implement protections for residents since the unexpected closure of Hahnemann, we are concerned that these changes are only temporary and will not lead to lasting changes or prevent dramatic closures. of teaching hospitals to reproduce as a result of private equity. investment,” said outgoing AMA President Bobby Mukkamala, MD.

“We will continue to advocate for the protection of residents who train in residency programs at privately-funded teaching hospitals and encourage sponsoring institutions to monitor these programs to minimize disruptions to residency training. , not only to ensure the continuity of excellent training for physicians-in-training, but also to ensure that they are able to continue to provide much-needed care to the communities and patients they serve,” said said Dr. Mukkamala.

“This is critically important for hospitals with a safety net in underserved urban and rural areas that provide essential services to our most at-risk patients.”

Mergers, acquisitions and doctors

Delegates also requested WADA to encourage GME training institutions, programs and relevant stakeholders to:

  • Demonstrate transparency about mergers and closures, particularly with respect to private equity acquisition of GME programs and institutions, and demonstrate institutional accountability to their interns by making this information available to current and potential interns .
  • Maintain comprehensive policies that protect interns, including those not funded by Medicare, to ensure mandatory transfer of funds after facility closure.
  • Enable designated institutional officials to participate in institutional decision-making to advance this transparency and accountability in the protection of their residents, fellows, and medical faculty.
  • Develop educational materials that can help trainees better understand the business of medicine, especially at the practice, institutional, and corporate levels.
  • Develop policies outlining the procedures and responsibilities of sponsoring institutions regarding the unforeseen catastrophic loss of faculty or clinical training sites and make these policies available to current and potential GME learners.

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In addition, the House of Delegates asked WADA to encourage:

  • Changes needed to PSLF to allow medical students and physicians to enroll in the program even if they are receiving some or all of their training at a for-profit or government institution.
  • Physician associations, boards, and corporations should write policy or issue their own statements on private equity issues to raise awareness in the physician community.
  • Physicians considering partnerships with corporate investors to consider the continuing education and well-being of trainee physicians who train under the direction of physicians in this practice, including the financial implications of existing funding that is used to support this formation.

Check out other highlights from the 2022 AMA Interim Meeting.

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