Sunday, March 13, 2011

Accountable Care Organizations: Academic Medical Centers are in Trouble

Big Myth: Academic medical centers-- that is, universities that have a medical school, teaching hospital,  faculty practice plan, and receive substantial research funding from the US government-- provide the best care at the lowest price.  

Wrong.  They provide great unique care-- for example, treatment of rare diseases or complications-- and they provide reasonable care for common diseases but at a very high price.  For more common syndromes and diseases, you are better off going elsewhere for your money-- places like Intermountain Healthcare in Utah and Advocate in Illinois.   

Unlike Intermountain, Advocate-- Carolinas, Kaiser, Geisinger, Group Health and Fairview Health, too-- which measured and balanced their clinical quality and cost-of-care for years, most academic medical centers are barely getting started measuring anything.  Their measure of success is research funding per year-- and I mean that quite literally.  AMC's have long measured their success by the amount of research funding they receive each year, particularly from the National Institutes of Health.  You could argue that higher research funding implies better research-- even that's a stretch-- but even if you accept that argument, there is no denying that it typically takes several years at best for that research to translate into meaningful and better care for most patients.

By accident or by design, I'm not sure which, the Obama administration is the first to shine a spotlight on this disparity between cost and quality at AMCs—and now they have a rocky road ahead to change their culture, quickly.  If AMCs traded in stocks, I’d rate them a “Sell” right now.

This Feb 17, 2011 article (link below) from the New England Journal of Medicine is a good overview of the cultural challenges ahead for AMCs.  Note that Johns Hopkins, discussed in this article, has its own insurance company, which makes it very unique among AMCs, because by managing its own insurance company, Johns Hopkins must manage both the cost of healthcare and the quality of healthcare that it delivers, otherwise placing its own insurance company in financial peril.  That's the key point:  AMCs must feel the financial pressure to deliver better care, in general.  Right now, they really don't.

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