Drexel University finds itself smack in the middle of the Hahnemann Hospital closing, a debacle that has gained national attention, including that of presidential candidate Bernie Sanders. The hit to Drexel’s reputation is minor compared to the tragedy of Hahnemann itself, but it is significant. And it was foreseeable from the beginning.
Once upon a time, the United States invested in public hospitals to care for the poor. With this investment came oversight and responsibility, as with any public management. The country invested similarly in things like public housing and public schools and universities. Generally, the goal wasn’t, excellence, but adequacy. Medical care, still not recognized as a human right in America, was nonetheless a necessity, especially in crowded cities where untreated disease could easily spread (rural communities could largely be left to fend for themselves, as they are today where some counties have shockingly little access to basic services.). Unchecked rental costs could make housing unaffordable for the poor in conditions meeting the minimum standards of decency and sanitation.
Public education was the only practical means of meeting the requirements of a skilled labor force in an industrial economy. For a while, these public institutions met their responsibilities tolerably well. Public schools educated a modern workforce and Americanized an immigrant population. Blacks could make do with less because their intended employment was menial. Public hospitals, likewise, provided basic services. Low-cost, rent-controlled housing sprang up in big cities, ugly but functional. In the halcyon decades after World War II, some public university systems, most notably California’s, became competitive with the better and even the best private schools, until “Berkeley” and “Harvard” could even be uttered in the same breath.
All this changed once America stopped growing as rapidly as it had been, and public revenues began to shrink. Investment was replaced by divestment. The method was the privatization of public services. This did not mean that public services were simply replaced by private ones; rather, the former were still subsidized by the public purse but less adequately, with less supervision of the results and, of course, with the necessity to factor in private profit .
There was a fairly uniform outcome: services got worse, more expensive and less accountable. To make up for cutbacks in public subsidy, private capital was invited in, and consumer debt, particularly in medical services and higher education, skyrocketed. This brings us to Hahnemann and to Drexel.
Hahnemann isn’t a public hospital, technically at least. It was founded in 1848 by Samuel Hahnemann as the first homeopathic hospital in the United States, with a medical school attached. It would eventually become Philadelphia’s first designated Level-1 trauma center for adults, even treating former President Gerald R. Ford when he became ill at the 2000 Republican National Convention. Primarily, however, it was a so-called safety-net hospital, that is, one that treated the poor and the indigent, and that was essentially supported by Medicaid. In other words, like such behemoths of the military-industrial complex as Lockheed-Martin and Raytheon, it was privately owned but lived on the public teat.
The difference — other than between saving lives and designing weapons to take them — was that the Pentagon’s corporations turned a handsome profit. Hospitals such as Hahnemann didn’t. Tenet Healthcare took ownership of Hahnemann in 1998, but its financial difficulties led it to begin liquidating its Philadelphia holdings soon after. In a city whose economy was so heavily dependent on its medical sector, this was a crisis. University of Pennsylvania and Temple University were approached by city and state officials, but both schools declined to take Hahnemann on. Drexel, with a few sweeteners, stepped into the breach. It would create a medical school of its own — something that had nothing to do with its experience or expertise, not to speak of its mission statement — but this was the era of President Constantine Papadakis, who, like Cecil B. Rhodes, never saw a border he didn’t want to cross or a country he didn’t think he could conquer. There was never a public discussion of the desirability of a medical school at Drexel, of how it might fit in with existing colleges and programs, or of its costs, risks and ultimate viability at a university with the barest of endowments. Needless to say, there was no presentation to the faculty senate, and no approval by it.
As for Hahnemann itself at that point, a senior administrator told me that everything in the place not bolted to the floor had been seized or looted. This was to be the new medical school’s chief teaching facility. The new school did grow. It lists today more than 1,000 medical students and over 500 biomedical graduate students, 550 residents, 600 clinical and basic science faculty and over 1700 affiliate and volunteer faculty. But its foundation was no more solid than that of Hahnemann itself, and the ground gave under when its current owner, a California hedge fund tycoon named Joel Freedman, filed bankruptcy proceedings for it on June 26. Though it may seem odd for a hedge fund tycoon to purchase a hospital, the purpose behind the maneuver, was anything but mysterious. Freedman, in the predatory style of buying to liquidate that was introduced in the Reagan 1980s, had no intention of investing in a hospital, let alone running one. He merely allowed its continuing losses to mount up — in excess of $85 million last year — until he could go to court.
In a last, cynical ploy, he offered Hahnemann for sale to Drexel. In late May, Drexel declined, responding that Hahnemann had, indeed, “no financial value.” In other words, Drexel knew it was riding a dead horse. How long had it known this? What other outcome did it expect but Hahnemann’s bankruptcy and likely closure, which was immediately announced? What provision had it made for the students, faculty and staff of the medical college, not to mention the fate of its patients? What financial impact did it expect for the university itself? On all these subjects, the university was about as forthcoming as the Russians after Chernobyl.
The Hahnemann story is presidential-candidate level news because it represents in a nutshell so much of what is structurally and morally bankrupt in this country. In a city with an official poverty rate above 25 percent, a hospital primarily servicing the poor faces closure, many of its units having already shut down. The facility itself, a publicly-supported enterprise, will make a killing for the private profiteer who steered it toward disaster. The ripple effect on the city’s stressed medical system will affect tens of thousands. There will be a direct effect on Philadelphia’s infant and maternal mortality rate, since Hahnemann is one of only six remaining hospitals in the city where babies are delivered.
The medical-industrial complex in America already absorbs 18 percent of the national economy. It was only a matter of time before it, like so much else, became the plaything of financial speculators. Making money off life and death, one way or another, is what much of modern America is about. As for Drexel, one can be sure that the effects will be severe enough. The university administration insists that the medical college will survive its crisis, although at what cost to it and to the institution as a whole, it does not say. The financial one will be high, the moral one higher. When you play poker with the Devil, the only certainty is that you’ll wind up with the short end of the hand.