By Joanne Conroy, MD
Last week, the AAMC, in partnership with Manatt Health Solutions, released a seminal new report: “Advancing the Academic Health System of the Future.” In it, we reported on the activities of the Advisory Panel on Health Care for the past year: 13 academic medical centers (AMCs), selected for their reputation as thought leaders, were interviewed and studied in depth. These interviews revealed several shared characteristics—perhaps secrets to their success?—and the concrete steps they are taking to ensure continued financial sustainability and support of their education and research missions.
As academic medicine seeks to transform itself in response to external forces including US health care reform, we find ourselves seeking new models and new inspiration. The future will bring new ways to deliver high-quality, complex comprehensive care; to fund and translate research into practice and lifesaving therapies; and to educate students and residents in a way that prepares them for a new care delivery environment. While there will certainly be unknowns, some changes already are forcing us to reevaluate our current business model. Fee-for-service payments, emphasis on acute care, and traditional vertical silos are giving way to paying for outcomes, emphasizing the continuum of care, and integrated leadership teams. The pertinent questions now are, What will be the pace of this change? and, What steps are necessary now to prepare for the future?
The 13 academic medical centers studied are growing into true health systems, offering a continuum of services. The emergence of larger systems is no doubt driven by alternative payment initiatives such as accountable care organizations and bundled payment programs, which require us to think more broadly than the delivery of complex acute care. The role that each academic medical center plays in larger systems of care will vary depending on its market and resources. Some AMCs will take the lead in forming a health system responsible for substantial geographies and numerous covered lives. Others may merge or partner with non-academic providers to achieve this market power. Those that fail to act could become isolated and marginalized in their markets.
The interviews revealed eight common themes among these 13 institutions that are taking proactive steps toward the future:
- The AMC of the future will be system-based.
- These academic health systems require strong and aligned governance, organization, and management systems.
- University relationships will be challenged to change as academic health systems grow and develop.
- Growth and complexity of an academic health system requires enhanced profiles for department chairs, new roles for physician leaders, and evolution of practice structures.
- Transparency in quality, performance, and financial information at all levels of the organizations is central to high achievement.
- Competitive viability and long-term mission sustainability will require a radically restructured operating model for cost and quality performance.
- It is time for AMC leadership on population health.
- A candid assessment of strengths and weaknesses is essential to achieve positive change.
As public insurance marketplaces are beginning to take shape, and private exchanges are emerging in some markets, it will be critical for academic health centers to demonstrate the value we bring to the communities we serve. One unavoidable need is to understand what can be removed from our cost structure that delivers little value to patients. This value analysis applies as well to our educational costs and research costs. We can shape our own futures; or be shaped by others who have little insight into the importance of training new physicians who will advance the science and practice of medicine. We must ensure an enduring capacity to develop the next lifesaving treatments and techniques, and to provide a safety net for patients when they have nowhere else to turn.
With these and other challenges in mind over the past year, the AAMC and Manatt Health Solutions have partnered to develop a framework for leaders in academic medicine to conduct the self-analysis necessary to help their organizations create a sustainable future. This framework and much more are available in the final Report.
After developing these findings and “fit testing” them with some of our leading organizations, I am excited at the courage and commitment of academic leaders to challenge their own status quo. They have a thirst for learning how other organizations approach change. They understand that they may spend years in painful transition as payment and care delivery models evolve. Although daunting, this has not stopped them from experimenting with the financial and performance risks of ACOs or bundled payments. They are critically examining their reporting relationships and infrastructure to become more efficient and effective. Through this work, I have only become more optimistic about our ability to thrive in the future. It will challenge us in many ways, but if history has any relevance, we will emerge as stronger organizations. A new beginning is in our sights.