Funding crunch will force renewed emphasis on quality

Teaching hospitals and medical schools are urged by a Commonwealth Fund task force to reinvent themselves to stay at the forefront of medical care.

By Myrle Croasdale, amednews staff. Feb. 24, 2003.

Academic medical centers survived the financial pressures of managed care. Now they must tackle the unpredictable nature of federal and state funding streams if they are to not just survive but expand upon their public service missions.

In its latest report, The Commonwealth Fund's Task Force on Academic Health Centers has offered up its ideas for completing this daunting task.

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"We're trying to create a vision here," said David Blumenthal, MD, the task force's executive director, of the challenges ahead.

That vision includes getting these institutional behemoths to become agile responders to public needs.

"To make a hippo nimble, everything is relative," he said. "You may not get it to stand on one foot, but you may get it to move a little faster."

This means that faculty physicians can count on their lives changing.

"I think that academic faculty need to expect change, and they need to get on the side of change rather than opposing it," Dr. Blumenthal said. "Some changes are good and some are not, but they need to understand the world will make new demands on their institutions and that will be filtered down to them."

Such changes include a greater accountability to the public for quality of care. Clinicians can expect to see their institutions make efforts to collect data on faculty performance.

"You can view this as being assaulted from the outside or view it as part of your professional responsibility," Dr. Blumenthal said. "How will faculty greet these changes? For teachers this report is good news. They should be paid fairly for what they do, in return they'll face requirements for improving the quality of their instruction and the performance of their students."

Better management is key

The sweeping report urges academic medical centers to revamp education, research and patient care, as well as rethinking the management of these institutions and their funding. Dr. Blumenthal said one often-neglected area is the development of management leadership. "In a very turbulent market, there needs to be a better support in the form of an improvement to manage. Academic health centers need more consciously to train leaders. Succession should not be as unpredictable as it often is."

The research side of medicine has done well in identifying young leaders and cultivating them as future managers, he said, but this is not part of the culture in the clinical branch.

Managing finances internally also needs an overhaul.

"Understanding the flow of funds within academic health centers is very difficult," Dr. Blumenthal said, because revenue comes from federal, state and private sources.

Deans and chancellors may not know the costs and revenues of the many parts of their institutions or how they work together, making it impossible to manage them well.

As an example, Dr. Blumenthal said there's no national data on the clinical income of faculty or the costs and revenues of faculty physician practices, because most schools don't know themselves.

"Doctors are paid by the schools and the hospital," he said. "Some of it is in one book, some in another."

As a result, it's hard to identify superior performance and productivity levels or to identify areas that need improvement. Units can operate independently and have their own revenue surplus and savings that the department won't know about.

"How can you begin to be a nimble organization, when you can't redirect funds to areas that need improvement because you don't know where the funds are flowing?" he said.

While the tasks ahead may seem overwhelming, Jordan Cohen, MD, president of the Assn. of American Medical Colleges, said many of the issues the report raises are already on the agenda. "Academic health centers are working hard to address the education and research issues the report addresses. A lot of things the board is calling for are happening."

They include measuring and reporting patient outcomes, with better care justifying the higher prices academic health centers charge.

"Right now it's a rare event to make such data public," Dr. Blumenthal said. Early experiments such as collecting patient satisfaction information and errors data has done little to change a self-protective culture.

Dr. Cohen said this was changing. "One of the problems is not the lack of will to do it, but the lack of adequate measures."

Standards for how to measure quality and patient safety need to be set before hospitals and medical schools can collect data for comparison.