The medical school attached to Mt. Sinai Hospital in New York City has provided six and seven-figure interest and payment-free loans to several of its faculty so they could acquire pricey local real estate, the New York Daily News reported.
Although loans and loan forgiveness as a physician recruitment tool is fairly commonplace, few such packages exceed the low six figures. Loan forgiveness is also a fairly new phenomenon among private providers, according to the Medical Group Management Association.
Fairly typical is a program offered by the Finance Authority of Maine, which helps retire medical school debt to bring new physicians into the state. The debt retirement cannot exceed $100,000.
In the case of Mt. Sinai's Icahn School of Medicine, the loans approached and even exceeded $1 million, and were to help faculty make personal real estate purchases. For example, Ron Hoffman, M.D., an oncologist attached to Mt. Sinai, received a $1 million loan to purchase a home in Brooklyn, according to the Daily News. He does not have to repay the loan until he leaves Mt. Sinai or sells the property. He would get to keep any profit derived from the sale.
David Adams, M.D., a cardiac surgeon, received a similar $1 million loan to purchase an apartment on Manhattan's Upper East Side. And Burton Drayer, M.D., received a $700,000 loan to purchase an apartment. Mt. Sinai had been the guarantor on a previous property he acquired in 1997, the Daily News reported.
Hospital officials said the loans are legal so long as they are reported to the IRS and approved by the Mt. Sinai board of directors.