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Managing Academic Health Centers: Meeting the Challenges of the New Health Care World

This report by The Commonwealth Fund Task Force on Academic Health Centers describes strategies undertaken by the nation's academic health centers (AHCs) to improve management of their patient care and research missions. According to Managing Academic Health Centers: Meeting the Challenges of the New Health Care World, many institutions are changing the way they are governed and managed. Further reform is necessary, however, for AHCs to respond to continuing tumult in the U.S. health care system.

AHCs provide vital social goods: educating our future doctors, conducting medical research, pioneering new treatments, providing highly specialized services, and caring for indigent patients with nowhere else to turn. Some of the nation's top AHCs, however, are in dire financial straits due to increasingly competitive health care markets and reduced government payments.

Even without government cutbacks, AHCs would have had to initiate reforms, the report says. The growth of managed care and changes in research and education demand that AHCs become more competitive and more efficient.

The Task Force finds that AHCs are devoting most of their time and energy toward reforms designed to enhance clinical market share while reducing clinical costs. Their strategies include developing primary care capabilities, protecting specialty care markets, reducing staff, merging with other institutions, and developing integrated health care delivery systems. In addition, AHCs are attempting to align the interests of their academic and clinical enterprises, allow greater autonomy for clinical enterprises, increase faculty accountability, and improve information systems.

The results so far have been mixed. AHCs have, for example, managed to reduce hospitalization costs. On the other hand, they have done little to groom leaders from within or ensure smooth transitions of power when executive staff move on or retire.

The report finds that it is unclear whether AHCs' reforms will prepare them for the changing health care system. Even with increased funding from the National Institutes of Health, AHCs must continue to seek outside funds to cross-subsidize research. They must also be more aggressive in commercializing research results. Finally, AHCs will have to become more self-critical and open to change if they hope to adapt and survive as truly modern institutions.

Facts and Figures

  • AHCs receive nearly 70 percent of their research funding from the federal government.

  • An unprecedented number of the nation's preeminent AHCs experienced fiscal difficulties in 1999.

  • The New England Medical Center, the University of California, San Diego, the University of Pennsylvania, and the University of California, San Francisco all cut staff by 20 percent or more during the 1990s.

Publication Details



Managing Academic Health Centers: Meeting the Challenges of the New Health Care World, David Blumenthal, M.D., M.P.P., The Commonwealth Fund, October 2000