Johns Hopkins Hospital might be the best in the nation, as one survey suggests, but that's no guarantee of success in a marketplace where insurers are demanding lower prices as well as high quality. Last week Hopkins announced it would "re-engineer" itself over the next three to five years to compete more effectively. It won't be easy. Academic medical centers face unique problems because they also teach young doctors, do research and care for large numbers of indigent patients, costs that push their charges higher than community hospitals. Can they thrive in a changing environment?
Donald Steinwachs
Chairman, Dept. of Health, Policy and Management, JHU School of Public Health
Many of us are reluctant to say yes or no, so we say maybe. . . . One future of the academic health centers would be to view themselves as specialty centers and sell the specialty services as the best available and to pay attention to keeping their costs in line.
The problem is the larger proportion of patients they admit to hospital are not specialty patients. They could be equally well taken care of in community hospitals. Academic health centers need those patients, not only to fill beds, but for teaching purposes.
The other scenario is they get involved in providing primary care services, and by building networks of primary care services or running their own managed care organizations -- they provide primary care, more routine patient care, plus specialty care through their own managed care network and still sell their specialty services to other managed care networks.
To my understanding there are no examples of academic health centers that have successfully demonstrated their ability to both run the acute care hospital and specialty services and at the same time run a growing and prospering managed care organization.
(But) I don't think there is probably any academic health center I am aware of . . . that really wants to be in that first category, that wants to become just a specialty provider, if for no other reason than it severely affects their training mission and results in downsizing.
David Blumenthal
Chief of health policy research development unit, Massachusetts General Hospital
I think that it's going to be extremely hard for them to thrive, but some will. I think some academic health centers, and Johns Hopkins may be one of them, are really well-positioned to succeed in the market in which they reside. They will probably have to change what they do and may do less of what they have done -- care for nonpaying patients, or unsubsidized research, or unsubsidized teaching.
They're going to have to be far more opportunistic in the marketing of themselves to outside customers. They're going to have to be more responsive to clients who they have not in the past considered important to cultivate. And they're going to have to be smarter and better and more cost effective.
Ralph Snyderman
Chancellor for health affairs, Duke University
I firmly believe that they can. I believe that they must for the good of American health care. But to do so we need to behave very differently. We need to provide cost-effective medicine of the highest quality. We need to redirect our core mission to serve the needs of society. We need to understand that we can't expect to be supported out of the good of government without people understanding the true value of the services we provide.
At Duke Medical Center we realize our costs are too great. We are as much as 25 percent higher than other health care providers in our region. We have recently developed in our hospital an operations improvement initiative, which will enhance the quality of our service and remove $70 million in expenses within two years. We are looking at the development of a managed care company as a joint venture with a health care insurer.
Donald E. Wilson
Dean, University of Maryland School of Medicine
To survive, I think the answer is yes. Thrive? Unless there are changes I think the answer would be no for a large number of academic health centers. Because if the ratcheting down (of prices) continues, there is a level by which nobody can cut anything else out and have the missions fulfilled.
I think one of the things that is important is to put a value on the educational and research mission. To the extent one can put a value on that, what that is worth to the nation . . . we (could) decide to put aside a certain amount of money to support that mission. And it may not be set aside for every academic health center.
(At Maryland) I'm actually fairly optimistic, because we're moving as rapidly and as aggressively as we can to try to make sure we do well. We are doing well and I believe we will continue to do well.