Academic Medical Centers are big, expensive and complicated—in a world that is moving toward faster, cheaper, and better. All three of those factors could work against AMCs under new payment models soon to go into effect, according to a recent PwC Health Research Institute study.
The study found that up to 10 percent of future AMC revenue could be at risk due to reimbursement changes, including those that favor quality over the quantity of care delivered.
That the payment system is moving from volume to value is hardly a secret. Yet a recent study revealed that only 5 percent of AMCs meet top quality standards. And while the rest of the health system is consolidating into larger systems with more standardized processes, AMCs continue to struggle with a decentralized governance structure that makes change unwieldy and difficult.
Even so, AMCs can nevertheless use their own strengths to build a better organization. Success depends on recombining their “DNA” in five new ways.
• First, build your brand by holding faculty accountable for quality and cost. Three-fourths of AMC leaders we surveyed said they would meet future funding challenges by improving quality outcomes. But achieving top quality scores means tackling practice variation and implementing shared clinical and administrative processes—no easy task when departments are built as independent fiefdoms.
• Second, look beyond your four walls and become part of a larger community network. Acquiring physician practices and hospitals and strengthening relations with community providers is key. When AMCs create a larger system, costs are spread more evenly, patients are more readily accessible for research, and the delivery of care becomes much more efficient.
• Third, create a new definition of “extender.” In the past, the use of extenders has typically referred to nurses and assistants extending the reach of physicians. Now the medical education system itself needs to be “extended” using technology, simulation and team-based education. Bringing students together for education prepares them for team-based patient care and the use of technology lowers overall teaching costs.
• Fourth, leverage your HIT investment to become an information hub. There are millions of patient records that AMCs can’t access. Sixty-five percent of AMC leaders said they would share this information within the next five years. But achieving this goal requires more upfront investment and collaboration to unlock this treasure trove of data.
• Fifth, align the research pipeline to clinical and business needs. If research has no connection to patient care, then you are losing opportunities to both improve your research and patient outcomes. Many AMCs want to expand and coordinate their translational research capability but success requires jettisoning non-core research.
It’s not enough to rely on your past reputation at a time when consumers gauge their decisions based on quality data and when employers use tiered health plans to lower costs. Implementing these five strategies for future sustainability will be difficult but it is clearly time to recombine the DNA and become a better AMC.
— Benjamin Isgur is a director in the PwC Health Research Institute.