Montefiore-Einstein Merger: The Inside Scoop
A COMMENTATOR EXCLUSIVE: Yeshiva and Montefiore Sign Memorandum of Understanding Regarding Einstein; Ownership and Control to Shift to Joint Entity; Montefiore to be Majority Stakeholder in “The Albert Einstein College of Medicine of Yeshiva University and Montefiore Medical Center
No, we have not “sold Einstein,” often referred to as “the crown jewel” of Yeshiva University. Einstein, should future negotiations go well and regulatory hurdles be passed, will be under the control of a new joint entity consisting of both Yeshiva University and the Montefiore Medical Center, marking the next step in a fruitful partnership dating back to the founding of the Albert Einstein College of Medicine (AECOM), as the nationally recognized Montefiore Medical Center, primarily a teaching hospital for AECOM faculty, becomes further enmeshed with AECOM both in name and in practice (President Joel responded to this characterization of AECOM with “You'll excuse me, but the Yeshiva (RIETS) is the crown jewel [of the University]!”).
So, how important is AECOM? I spent the summer doing research in biophysics at the University of Michigan, far from the Tri-State area, and I was often asked where I went to college. When I responded “Yeshiva University,” our school was also recognized because of AECOM, one of the nation's top research centers in biomedical science. In a very concrete manner, the strength of Yeshiva University's excellent professional graduate schools, which include AECOM and the Cardozo School of Law, serves each and every one of us when we venture beyond the campuses of the Yeshiva University system.
Every member of the Yeshiva University system benefits from being part of a highly ranked, “top 50” university, and the tremendous quantity and quality of biomedical research conducted at AECOM plays a large role in the national rankings of Yeshiva University. This bright future, evident from excellent funding levels in terms of ultra-competitive National Institutes of Health (NIH) grants, was threatened by Einstein's estimated operational shortfalls of about $40-50 million each year. This phenomenon is not unique to YU. Dr. Shirley Tilghman, President Emerita of Princeton University, discussed at the University of Michigan this past summer how the future of biomedical research is being shaped by administrators of academic medical centers, who face hard choices about how to use the money generated by the hospital/clinic to balance out the costs of conducting federally funded research. Yet, due to the quirks of history, such an option was not immediately available to stabilize Einstein's leaky finances, since the Montefiore Medical Center, while in a partnership with YU, was financially independent, and therefore not bound to share their profits to balance the budget at AECOM, which was straining to support the large quantity of excellent research. President Joel noted in an interview that the only other leading medical school within a university to have affiliates, rather than to own and operate their own hospitals, was Harvard, which also has a multibillion-dollar medical school endowment.
What were the choices, for all parties involved? The initial purpose of AECOM, whose first classes were held in 1955, as Albert Einstein himself noted in the letter allowing the use of his name, was its then-unique mission to “welcome students of all creeds and races,” at a time when most medical school admissions discriminated against Jews, Catholics, and African-Americans (as a non-exhaustive list of those not white and Protestant). The racist and retrograde “quota” systems of medical schools across the country only 70 years ago have since been replaced with modern, professional non-discrimination policies. At the same time, Albert Einstein College of Medicine has taken on a new, perhaps more vital raison d'être: pushing the limits, and standing on the forefront, of biomedical research. In 2013, researchers at Einstein received from the NIH more than $155 million dollars, in one of the most competitive funding environments ever, ranking 25th out of 139 U.S. medical schools in terms of NIH funding, which shows an improvement in its national standing since ranking 32nd in 2007.
President Joel noted that Montefiore benefits tremendously from being associated with a research-intensive medical school, which attracts top medical talent with the promise of continuing their research—as well as having the standing of academic faculty—rather than serving as mere clinicians or administrators. President Joel also confirmed that between 40-50% of the University's yearly budget shortfall was due to AECOM, a clearly unsustainable situation when those amounts are in the range of $40 million a year.
Although unconfirmed, it seems that YU made Montefiore an offer they couldn't refuse: the University could have threatened to close Albert Einstein, or to continue it as a medical school with a teaching focus, citing the continual budget shortfalls associated with heavy research totally unsupported by any money coming from the affiliated hospital, clinic, and medical center. On the other hand, in a different funding environment, it seems possible that Montefiore might be better positioned to take advantage and benefit from the indirect cost funding available through federal grants, being much more familiar with the nuts and bolts of running a premier medical institution in a profitable and efficient manner.
In an interview, President Joel clarified that no steps have yet been taken, other than the signing of a memorandum of understanding between YU and Montefiore about the future of AECOM. Further developments are expected to occur “in the next 90 days,” if negotiations and regulatory hurdles from the Middle States Commission on Higher Education, YU's accrediting body, and the Attorney General go as planned, since YU is the fiduciary (trustee) for AECOM (the beneficiary), the highest level of legal and financial responsibility, and therefore any change of arrangements as to the custodial role of YU vis-a-vis AECOM must pass legal scrutiny. President Joel also cited the “memorandum of understanding” as assuring that AECOM will continue the “Torah u'Madda” message of Yeshiva University, by remaining kosher, mindful of Shabbat and Jewish holidays, and integrated with the rest of the University, including the continuation of a special relationship between YU undergraduates and AECOM, both in research and admissions, which currently compares with great parity to the rate at which other top medical schools admit students from their own university, a percentage close to 15%. The proposed changes, noted President Joel, “shift fiscal responsibility to where it belongs. We are re-crafting it to be a system that can prosper as a research institution affiliated with a great university.”
Uniting the clinic and the college, for an academic medical center, makes perfect sense. The unique relationship that Albert Einstein had with Montefiore may have been both sustainable and conducive to mutual excellence in the past, but as Dr. Tilghman noted this past summer, academic medical centers across the country are taking stock of the difficulties related to “business as usual,” and while many are seeking out new collaborations, not all institutions are lucky enough to have such clearly sensible options available.