The Medical Faculty Associates lost more than $107 million in fiscal year 2024, more than doubling officials’ projected deficit and marking its greatest annual loss since GW assumed control of the medical enterprise.
Officials said last October that they expected the MFA — a group of physicians and faculty from the School of Medicine & Health Sciences and physicians at the GW Hospital — to lose between $30 and $50 million in FY2024 after they lost nearly $80 million in FY2023 and another $80 million in FY2022, according to the financial statements, which are audited each fall by accounting firm Grant Thornton, LLP. Chief Financial Officer Bruno Fernandes declined to comment on why the MFA lost more than $107 million this fiscal year and what officials think caused the MFA’s losses to surpass initial projections.
MFA Chief Executive Officer Bill Elliott said in an email obtained by The Hatchet sent to MFA staff before his and Fernandes’ update during last week’s Faculty Senate meeting that the GW and MFA boards of trustees and the MFA’s leadership agree that the enterprise’s “continued and significant losses” are “unacceptable and unsustainable.”
He said it is evident that “additional operational and structural changes” are needed to ensure the MFA is financially viable. Elliott said it is currently premature to discuss some of the “possible future changes” to the MFA’s structure, but he can assure staff that they will continue looking for ways to improve the MFA’s performance.
“No idea is off the table and we are committed to finding sustainable, long-term solutions that will benefit the MFA’s patients, and the clinicians and staff who care for them every day,” Elliott said in the email.
Fernandes declined to comment on why the MFA lost almost $30 million more this fiscal year than the last two fiscal years or when officials became aware that the MFA was expected to lose more than they initially projected. He declined to say when officials will reevaluate their financial support for the enterprise and if they’ve considered declaring bankruptcy on the MFA or selling it in light of their swelling financial turbulence.
He also declined to say how much he projects the MFA to lose in FY2025. Faculty senators went into executive session during last week’s senate meeting to hear Fernandes’ annual MFA’s fiscal year update, where he typically publicly shares how much officials project the MFA to lose during the current fiscal year. All nonsenate and nonadministrative attendees are not allowed to attend executive session.
Fernandes said despite ongoing efforts to “curtail” the MFA’s losses, the boards of trustees overseeing both GW and the MFA decided that bringing on a full-time CEO was “necessary.” Officials hired Elliott in May to serve as interim CEO after former CEO and SMHS Dean Barbara Bass stepped down to allow for “full-time leadership” to helm the medical enterprise. Officials later appointed him as permanent CEO in October.
Fernandes declined to say if officials’ realization that the MFA would lose more than $50 million more than initially expected influenced their decision to hire Elliott.
“Since Bill Elliott joined the MFA as CEO in May, he has been addressing an array of issues comprehensively with the goal of building a sustainable clinical practice to support the region’s health and well-being while providing the essential training setting for our SMHS students and residents,” Fernandes said in an email.
The MFA spent more than $485 million and racked in slightly more than $377 million in revenue in FY2024, following a similar spending trend in FY2023 where officials spent nearly $450 million and made about $370 million in revenue. The report also states that the MFA has accumulated a total of $272,107,000 of debt to GW and a $120 million debt to other entities, which likely includes EagleBank, the MFA’s primary external lender.
The University’s verbiage surrounding the MFA in recent months has departed from previous statements, diverging from maintaining that the MFA has faced “strong headwinds” due to inflation after officials published the FY2023 consolidated financial documents last year, to last week pointing out the MFA’s “deep and systemic challenges.”
The financial statements say that GW is held liable for decisions the MFA makes, meaning GW would have to pay the MFA’s borrowed debts if it were to file for bankruptcy. Faculty senators have long pressured the University to reevaluate the MFA’s financial losses and their potential effects on GW’s “underfunded areas,” like student financial aid and undergraduate education.
Officials walked back predictions that the MFA would break even in FY2022 and FY2023. Fernandes said last year that he doubted the MFA would break even in FY2024.
University President Ellen Granberg said in September that officials over the past year have increasingly recognized the MFA as a “modern clinical management practice,” which encouraged officials to hire Elliott. She also said the MFA is continuing to make all debt payments to GW on time.
Former MFA CFO Robin Nichols left the enterprise earlier this year less than nine months after she began her role as CFO on Oct. 16, 2023, with officials listing a job posting for her position on July 2, 2024. University spokesperson Julia Metjian declined to say if Nichols resigned or was fired.
She also declined to comment on the status of hiring a new CFO because the University “will not” comment on personnel matters.
Nichols declined to say in August why she left the University because of a nondisclosure agreement she signed that prevents her from speaking about GW but confirmed that she is no longer working for GW.
