Officials have waived a $20 million loan extended to the Medical Faculty Associates three years ago.
The MFA, an independent network of doctors practicing in the D.C. area who teach students in the School of Medicine and Health Sciences, received a $20 million line of credit from the University after spending three times its revenue in fiscal years 2015 and 2016. The line of credit, which officials extended in 2016, gave the MFA an immediate initial draw of $5 million at an interest rate of 6 percent.
Executive Vice President and Chief Financial Officer Mark Diaz said officials originally provided the loan, which was originally scheduled to last until January 2026, to get the MFA “over a hump.”
“The MFA, probably three or four years ago, was going through some fiscal turbulence and to the point where it needed some bailing out,” Diaz said. “It had avenues for liquidity and lines of credit from banks, but it needed a little more help.”
Diaz said the GW Hospital, owned partly by private hospital management company Universal Health Services and partly by the University, also extended the MFA a $20 million loan. The University “absolutely” supports forgiving the hospital’s loan to the MFA, but UHS, the hospital’s majority owner, is not ready to do so, he said.
“We thought waiving the loan helped them in that stability,” Diaz said. “And so anything that would go to that end, we would be in favor of.”
University President Thomas LeBlanc named strengthening GW’s medical enterprise – the medical school, the MFA and the hospital – as one of his top five priorities as president when he arrived on campus two years ago. Officials soon afterward renegotiated the relationship between GW and the MFA to acquire more rights over the MFA, like the power to approve the organization’s annual budget and CEO.
Earlier this year, MFA doctors said the change in the relationship would strengthen the medical group’s finances by improving management practices.
This article appeared in the October 17, 2019 issue of the Hatchet.