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Academic Centers Must Change or Perish in Climate of Managed Care

Academic Centers Must Change or Perish in Climate of Managed Care

BALTIMORE--Academic medical centers must now operate in a health-care
environment that "has become increasingly unfriendly, even
hostile economically," said former New England Journal of
Medicine editor Arnold S. Relman, MD.

Those institutions that do not respond with dramatic changes risk
perishing, a panel of participants in the battle agreed at the
annual meeting of the American Association for the Advancement
of Science (AAAS).

Indeed, it appears that some financially weak institutions will
fail, no matter what. Based on his studies, David Blumenthal,
MD, suggested that early in the next century, a large majority
of the nation's 125 academic medical centers, through down-sizing
and other changes, "will look more like medical schools of
30 years ago, before Medicare."

Dr. Blumenthal, chief, Health Policy Research and Development
Unit, Massachusetts General Hospital, believes that many centers
will survive, "but the question is, will they continue to
do what academic health centers have done in the past." He
added: "I don't think it is unrealistic to expect that 10%
of academic medical centers and medical schools will not be around
in 15 years."

The main problem threatening academic medical centers and their
employees is declining clinical revenues, largely the result of
managed care policies.

Private insurers and the Medicare and Medicaid programs are shifting
patients to less expensive community hospitals, limiting hospital
stays, and demanding discounted fees for physicians', inpatient,
and outpatient services.

This has cut clinical revenues, which academic centers have long
used to help off-set the costs of fulfilling their teaching and
research roles, and drastically reduced or eliminated their ability
to subsidize the care of indigent patients by shifting some of
their costs to patients with private and government insurance.

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