What Should Be the Vision for the Future of Academic Medical Centers

Think Tank Thursdays. New York has publishing and fashion, LA has television and movies and DC…well, DC has influence and policy. On any given day in this town, you have seasoned professionals going about the business of influencing thought. Influencing whom you ask, influencing the legislative staffers and ultimately policy makers regarding any myriad of issues for which legislation is being crafted. Many are familiar with the lobbyist who work for law firms and associations and use their tremendous budgets to influence lawmakers and by extension policy.  There is yet another class of influencers that exist in Washington who exert their power of influence in a far more nuanced fashion. They are the Think Tanks, repositories for scholarly inquiry and research on any number of policy issues.  Think Tanks use their brain trust of scholars and research to contribute to and advance the debate on policy issues. And yes, ultimately influence the policy crafted.  With this periodic series, Think Tank Thursdays, I will give you a look inside selected institutions and the research they set forth.

As I continue my examination of health reform in the Obama Era, my agenda for Monday led me to consider Academic Medical Centers (AMC) by attending The Path Forward for Academic Medical Centers: Innovation, Economics, and Better Health, a panel discussion at the Brookings Institute.

The Importance of the Academic Medical Center

AMCs are vital to our health care system because they educate the next generation of health care and biomedical research professionals, they receive the majority of extramural funds allocated for basic science and applied research, and ultimately, they nurture the expertise to successfully treat and sometimes cure the medical maladies that plague us.  These nonprofit organizations serve a disproportionate share of lower-income and uninsured patients in addition to individuals whose illnesses have the greatest degree of medical complexity.  In his introduction, Dr. Mark McClellan of the Brookings Institution observed that members of the Council of Teaching Hospitals and Health Systems

  • provide 41% of all charity care
  • receive 56% of all NIH extramural awards (along with AAMC medical schools)
  • and train 76% of all residents physicians.

Reforms in the health care system leading to the failure of AMCs would result in a subsequent loss of the essential services previously discussed.  Because they play a vital role in the system, their voice at the table of stakeholders in health reform is significant.

What Should Be the Vision for the Future of AMCs

Economic pressures of the last two decades in particular, have challenged AMCs to implement sustainable business models.  Presidents from three organizations attempted to answer the question, “What should be the vision for the future of AMCs?”  Using Duke University Health System as a model, the CEO, Victor Dzau discussed an overall vision.  Elaine Ullian, CEO of Boston Medical Center discussed the future of AMCs from the perspective of the hospital and health system.  Baylor Health Care System CEO, Joel Allison discussed the future of  AMCs from the provider prospective.  There were recurring themes among the presentations (available below).  There is a strong focus on improving health care delivery.  Organizational changes like the shift from tertiary care hospitals to integrated health care delivery systems are a common theme as AMCs look for ways to add value to their community in ways they previously had not.  Additional strategies include changing medical education and implementing professional training to help health care providers and allied health professionals perform more efficiently as health care delivery teams.  Specific examples that panelists referenced were the use of the medical home model, as well as the use of  hospitalist physicians and physician champions. All of these are implemented with the intention of placing the patient at the center of care.  There is also a focus on improving health care value through comparative effectiveness research, widespread use of evidence-based medical interventions, and the use of personalized medicine.

What Is a Sustainable Business Model for the Future AMC

There was a consensus from the panel that a payment structure providing incentives for prevention, disease or care management, and population health rather than a collection of interventions for unrelated each episode of care is preferred. Yet, redesigning the payment system can be a nuanced endeavor.  Dr. Gary Gottlieb, President of Bringham & Women’s and Faulkner Hospitals and panelist when he observed,

“It’s important to realize that these are very, very complex organizations, and that unwinding them just for the focus specifically to get best value of purchase of unit service in one area may, in fact, unwind and have other unintended consequences that will have severe outcomes. These places are academies, they are research institutes, as well as the providers of a lot of care, some of which needs to be in our venues and some of which needs to be elsewhere, so that payment reform needs to consider each of those issues very, very carefully.”

Indeed, the very design of integrated health care delivery systems emphasized in the Duke and Baylor health system presentations are intended to improve the ability of the AMC to deliver what Mr. Allison phrased as “the right care, at the right time in the right place and the right amount”.  The appropriate use of health promotion, disease prevention and screening interventions yields a higher quality of life and better health care value.  Dr. Reed Tuckson, Chief of Medical Affairs for UnitedHealth Group and panelist  uderscored this point when he asked of his fellow panelist,

“I was very encouraged by your reorganization models, and I wonder…Given that the things that are coming into your door is  obesity, diabetes, preventive cardiovascular-related, do you have another box in your new vision that incorporates…real community intervention, that creates a new science, a new model, a new paradigm, new providers, assets that really get at that stuff in a way that is transformative and that gets a higher proportion of your revenue than it gets today?”

But even as AMCs are reorganizing to better deliver care to a community and manage the health of defined populations, I stil wonder if this is a sustainable business model.  While executives from Duke and Baylor cited examples of community initiatives, this does not change the fact that private health insurers continue to selectively market in an attempt to maximize a covered population that is younger with the least amount of catostrophic, complex and/or chronic illness possible.  Ullian, Boston Medical Center CEO and panelist put it this way,  “I have been told…when the economy was strong or weak…what you do is somebody else’s problem, and we’re really glad you do it, but we’re not going to give you a dollar for a dollar worth of care.”  Since Massachusetts reformed its health insurance, Boston Medical Center has seen a drop in reimbursement such that it receives $0.64 for every $1.00 it spends on caring for its patients.  After so much shopping for the optimal patient mix, the sickest and most complex cases are covered by Medicaid and Medicare which still operate under a fee-for-service payment structure that contains perverse incentives.

Here’s the take home message.  Because of their unique mission and the services they provide, AMCs must remain viable.  They must continue to reorganize such that they provide maximum value through delivery of appropriate health promotion and disease prevention in the community setting, better coordination of care, and faster translation of innovations from the research setting to the community setting.  Payers must immediately restructure reimbursement systems so that they align with high value, integrated health care delivery.  Leaving public payers responsible for the most medically complex individuals is destructive to the health care system as a whole.


Medical Center Presentations

McClellan, M.  The Path Forward for Academic Medical Centers: Innovation, Economics, and Better Health.  Power Point Presentiation on April 27, 2009 at The Brookings Institution.  Washington, DC.

The Path Forward for Academic Medical Centers:  Innovation, Economics, and Better Health. Transcript. April 27, 2009.  The Brookings Institution. Washington, DC.


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