Academic Health Centers in a Changing Environment

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Abstract
Prologue:In a nation that holds academic institutions in high esteem, academic health centers(AHCs) have enjoyed a place of particularly high prominence. Their academic mission, including caring for vulnerable populations, conducting biomedical research, and training the health care workforce of the future, has set them apart from other private institutions. They have long enjoyed a level of federal subsidy and other cross-subsidies that has allowed them to continue to carry out these functions in the face of declining revenues from other sources. However, the marketplace has caught up with AHCs. “ Academic medicine fears for its future,” wrote John Iglehart in summarizing a recent conference on the future of AHCs, “in part because recent developments in the health insurance marketplace are threatening the traditional manner in which its missions have been financed … [particularly] the rapid growth of managed care plans.” In this paper David Blumenthal and Gregg Meyer outline some of the challenges AHCs face as they retool themselves for the next century. Their paper is based on case studies of seven top academic institutions, all members of the Association of Academic Health Centers. The authors found that these institutions tended to respond to market pressures in a variety of ways, but that all were placing less emphasis on their teaching and research functions. This has critical implications for the future workforce as well as for the state of biomedical research, for which this country is internationally renowned. Blumenthal is chief of the Health Policy Research and Development Unit at Massachusetts General Hospital in Boston and is associate professor of medicine and health care policy at Harvard Medical School. Meyer is assistant professor of medicine at the Uniformed Services University of the Health Sciences School of Medicine in Bethesda, Maryland. Both are physicians. To evaluate the potential problems facing academic health centers (AHCs) as a result of market-driven health care reforms, we conducted case studies of seven nationally prominent AHCs during 1994. Findings suggest that although AHCs were not yet feeling the predicted impact of competition on their financial health and ability to sustain their academic missions of teaching, research, and care of vulnerable populations, they were adopting a variety of strategies for responding to those perceived threats, especially networking and cost reduction. They were placing considerably less emphasis on restructuring their research and teaching missions to prepare for anticipated fiscal pressure. Our analysis suggests that even the most successful AHCs are likely to be fundamentally altered by the revolutionary changes occurring in health care markets.