Birthing Pains: An Einstein Agreement is Made
On February 3rd, Yeshiva University and Montefiore Health System, in a joint statement, announced an agreement on the terms of the deal between the two institutions that had been in negotiations since last July. The deal promised to grant Montefiore greater financial control over the Albert Einstein College of Medicine, a major cause of the University’s annual deficit. Last December, it was confirmed by Moody’s Investor Service that negotiations had broken down the between the two parties, which threatened to plunge Yeshiva University into deepening financial straits. However, it now appears that, pending “final documentation and regulatory approval,” the deal is set to continue as planned.
The weeks leading up to agreement were marked by uncertainty and unrest; in January, the faculty senate of Einstein issued a vote of no confidence directed at President Joel and Yeshiva University board amid much discussion of the responsibility of the administration in the future of the medical school. President Joel, in an exclusive interview with The Commentator, characterized the senate’s actions as a reflection that “different parties have different realities,” and that the boards of Einstein and YU “didn’t need a resolution of the faculty to decide that there should be a deal”; in his view, “their actions were not a factor in this.”
Of course, it was not only the faculty who seemed concerned. On the day the agreement was announced, hundreds of students rallied in support of the Einstein deal. As President Joel noted, the university has had a long and proud history with both Einstein and Montefiore. Einstein and Montefiore have been in various contractual agreements for several decades, well before President Joel took office. He describes this latest agreement as “a natural synergy.” In his words, “for Einstein as a medical school to be a research enterprise in 21st century, it has to be in unity, given Einstein’s quality, with a great medical system, and Montefiore is a great medical system. So it’s a natural synergy. It’s where it needs to go.”
This tightening of the bond between Montefiore and Einstein comes at a particularly troubling time in Yeshiva University’s history. On the same day that the agreement was announced, new figures about Yeshiva University’s endowment pool were revealed. As reported in the annual survey by Commonfund and the National Association of College and University Business Officers, of 92 North American universities with endowments of over one billion dollars, Yeshiva University was the only one among them whose endowment has not increased but in fact decreased by 8% in the last fiscal year. Expenses related to the maintenance of Einstein are reported to account for approximately two-thirds of the deficit, $100 million of the total $150 million of debt that YU faces. “Remember, those statements will not be reflective of tomorrow, they will be reflective of yesterday,” President Joel warned.
Adding to the difficulty of properly addressing unclear expenses is the lack of transparency as to what the deal would actually do. President Joel maintains that Yeshiva University will continue to hold a 49% share in the medical school’s equity, as well as all of its real estate. However, Joel guarantees that the University will no longer take any financial responsibility over Einstein. For the foreseeable future, YU will remain the degree-granting institution; however, it is conceivable that Einstein may become its own degree granting institution. As to why Montefiore would agree to Yeshiva University seemingly maintaining all the benefits of Einstein while, simultaneously, accepting the hefty operating expenses of the school, President Joel only said that “it’s not an arms-length adversarial relationship. I mean, sometimes there are difficult negotiations, but Montefiore and Einstein have grown together with Yeshiva University.”
Nor is it foreseeable that future negotiations will be without struggle. The agreement on ‘meta-factors,’ as President Joel describes the primary terms, still leaves many details to be sorted, including employment policies, contracts, procurement policies, human resource policies, and IT resources, to name a few. Additionally, President Joel also noted that there were still services which needed to be rendered as well as paid for, a fiscal ambiguity Yeshiva University has grown accustomed to. Still, President Joel suggests that the deal between Montefiore and Einstein will likely be finalized no earlier than June.
The process is a long and difficult one, fraught with uncertainty in its past and greater wariness of the future. It is, in this sense, an embodiment of the atmosphere surrounding Yeshiva University at this moment in history, and many are keenly observing the Einstein deal as a portent for the University as a whole. President Joel admitted “it’s not easy birthing…giving birth doesn’t come without pain.” With the labors and near-miscarriages, one can’t help but wonder how much longer the institution must carry an uncertain pregnancy, and what pains it must undergo to deliver on its promises.