Failure of the merger of the Mount Sinai and New York University hospitals and medical schools: part 1

• Published in: Academic medicine Vol. 85; no. 12; p. 1823
• Main Author: Kastor, John A
• Format: Journal Article
• Language: English
• Published: United States 01.12.2010
• Subjects: Academic Medical Centers - economics; Health Facility Merger - economics; Hospitals, University - economics; Humans; Interinstitutional Relations; New York; Schools, Medical - economics; New York
• ISSN: 1938-808X
• DOI: 10.1097/ACM.0b013e3181f65000

This is the first of two articles in this issue of Academic Medicine that, together, report the author's findings from his study of the attempts by the leaders of Mount Sinai and New York University (NYU) academic health centers in New York City to merge their medical schools and hospitals, and the failure of those attempts. The contemporary and predicted effects of managed care, capitation, and the Balanced Budget Act of 1997 were major factors stimulating this and other mergers at academic health centers. The hospital executives and board members also anticipated saving significant amounts of money by consolidating back-office functions and clinical services. The leadership at Mount Sinai were the most enthusiastic proponents of the merger. At NYU, many trustees feared that their hospital, which was generating a surplus when the merger was being planned, and its medical school, which operated at a deficit and was dependent on hospital earnings, would, in time, drain the university's endowment if the merger took place. Accordingly, some of the leading trustees favored separating its hospital and medical school from the university and consigning them to a new company with Mount Sinai. Influential members of the NYU faculty strongly opposed this. The attempt to create a merged entity of the hospitals and medical schools failed after several frustrating months of interinstitutional negotiations. The trustees and executives then attempted to develop a merger of only the hospitals; that process is described in the companion article in this issue of Academic Medicine.