George Washington University has signed a definitive agreement that will offload financial responsibility for its struggling physician practice group to longtime partner Universal Health Services (UHS) while maintaining its existing academic and educational affiliations.
Under the deal, in the works for months and announced Tuesday, the university’s Medical Faculty Associates (MFA) practice group will be folded into a new nonprofit entity controlled by UHS subsidiary, called Capital Medical Group.
The new physician practice group “intends” to hire “the majority” of MFA physicians and staff, who would deliver care at the locations currently serviced by MFA—George Washington Hospital and Cedar Hill Regional Medical Center, as well as their affiliated outpatient sites. After the five-year, “renewable” agreement, UHS “will assume full financial responsibility for clinical practice operations,” according to the organizations.
The arrangement will see the university provide up to $230 million to Capital Medical Group and absorb the loans it's provided to MFA over the past few years to cover its substantial losses of more than $450 million since 2022, including a $110 million net loss during the most recent fiscal year ended June 30, 2025. As of that same date, the university reported $370.9 million of outstanding loans to MFA, with the group reporting $-444.2 million of total net assets.
The deal is expected to close this summer, pending closing conditions, with the organizations working to “ensure a smooth transition” for medical care, education and research in the meantime.
“Today’s agreement is an important step forward for GW and the communities we serve,” Ellen Granberg, president of George Washington University, said in an announcement. “It successfully safeguards the School of Medicine and Health Sciences’ missions of high-quality education and research, while providing for the funding and delivery of physician services at GW Hospital. In addition, this agreement provides financial certainty for the University and a sustainable path forward for the clinical operations at GW Hospital and its affiliates.”
For-profit UHS already runs the university-affiliated hospitals—it became the sole owner of George Washington University in 2022 after 15 years of majority joint ownership, and opened Cedar Hill Regional Medical Center just last year.
MFA was formed in 2000 but was brought under George Washington University in 2018, a decision then-President Thomas LeBlanc said would “help the university stabilize the MFA financially and more strategically align the clinical and academic missions.”
The new arrangement looks to unwind the financial side of that decision while preserving academic alignment. Clinicians transitioning to the new group will retain their faculty appointments at George Washington University’s School of Medicine and Health Sciences, allowing them to continue teaching, training and researching. The university remains the sponsoring and accrediting institution for Graduate Medical Education programs serving the medical school’s residents and fellows, and George Washington Hospital will remain their primary clinical site.
The arrangement was months in the making, with George Washington University and UHS announcing a preliminary agreement back in October that was followed by a series of negotiating delays. Still, an FAQ on the arrangement, penned by Granberg, suggested that the university isn’t 100% pleased with the terms.
“We achieved the core outcomes we needed: a sustainable framework, continuity of clinical services and a structure that maintains faculty roles and supports our education and research missions,” she wrote. “At the same time, I want to be candid—agreements like this involve trade-offs. No one gets everything they want. What mattered to me is that we reached an outcome that protects the people and the missions we are responsible for and that positions GW well for the future.”
Granberg did not specify those compromises. She acknowledged that “people might have strong reactions” to the agreement, but stressed that “the status quo was simply not sustainable” for the university’s finances.
King of Prussia, Pennsylvania-based UHS operates 29 acute and 346 inpatient behavioral care facilities, and reported $17.4 billion in annual revenues during 2025.
During recent earnings commentary, executives have said they expect volumes at Cedar Hill Regional to ramp up across 2026 as the new facility finds its footing. Local leaders reportedly pointed to the delayed negotiations between UHS and the university as cause for staffing shortages that affected care in its predominantly Black community in D.C.’s seventh and eighth wards.
Jason Barrett, CEO of George Washington Hospital and group vice president of UHS’ D.C. Region, said in this week’s announcement that the company believes the new arrangement “will help speed the growth of medical inpatient and outpatient services at Cedar Hill Regional Medical Center, including the addition of community doctors. We remain wholly committed to providing high-quality care across a broad range of service lines to best serve patients.”
George Washington University, in the announcement, said it “is committed to ongoing engagement in community health initiatives in Ward 7 and Ward 8 to promote health equity and improved health outcomes in the community.”