Three Strategies Used by Academic Health Centers to Expand Primary Care Capacity

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Abstract
The growth of managed care in the late 1980s and early 1990s severely disadvantaged academic health centers (AHCs). The reliance on primary care gatekeeping and selective contracting by managed care plans were two contributing factors. Because most AHCs had only a modest primary care capacity, they were understandably concerned about their strategic positions. Thus, many felt it was essential to expand their primary care capacities to ensure downstream referrals, to improve contract negotiations with third parties, and to permit assumption of risk for defined populations. Among the different approaches used, three principal strategies emerged for the expansion of the primary care capacity of AHCs: (1) the “assembly strategy,” in which many AHCs recruited new generalist faculty into existing clinical departments; (2) the “acquisition strategy,” in which AHCs purchased established primary care practices in the community; and (3) the “affiliation strategy,” in which some AHCs affiliated with primary care physicians in the community and formed networks of academic and community physicians. For each of these approaches, the author reviews the relative merits and disadvantages, and analyzes why some AHCs' original assumptions about the imperative for increasing primary care capacity may have been spurious. He concludes that recent marketplace and regulatory changes may make it less necessary for AHCs to secure substantial primary care bases in the future.

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