PwC researchers identify challenges and possible solutions
NEW YORK - With payment reform looming, academic medical centers (AMCs) nationwide are likely going to have to figure out how to deliver the same high-quality care in a more efficient way in order to reduce costs, according to a new report from PricewaterhouseCooper's Health Research Institute.
The report, “The future of the academic medical center: Strategies to avoid a margin meltdown,” points out that while AMCs are the heart of the health system where new treatments are discovered and where the most challenging patients are cared for, consumers are becoming less willing to pay the higher premium costs at these institutions and research costs are continuing to rise.
The report includes new findings based on a nationwide survey of 100 AMC leaders and a separate survey of 1,000 U.S. consumers. In it, PwC identifies three important reasons for academic medical centers to change, including political and budgetary pressure from both the federal and state governments; AMC brand breakdown, in which some low-ranking AMCs could damage the brand image for all; and organizational misalignment between medical education, research and hospital/clinical care.
The report also recommends five strategies for AMCs to help avoid the total evaporation of their margins, including building the brand by holding faculty accountable for cost and quality, becoming part of a larger community network, pushing the envelope on using new technology to extend clinical care and medical education effectiveness, become an information hub to realize a return on HIT investment and aligning research and hospital structuring with clinical and business strategies.
“Basically, all of the strategies address the ability of hospital organizations to be cost effective and to match the cost they are incurring to the setting the patient is in,” said Bob Valletta, one of the report's contributors. “The main mission is quality. Is there a way to deliver that quality at a more efficient cost and even improve that quality? There is already a focus on that now and we believe there should be an even stronger focus.”
Joanne Conroy, chief healthcare officer at the Association of American Medical Colleges, agrees that becoming part of a larger healthcare network is important for hospitals.
“It's really about redesigning care, putting the right providers in the right sites of service that will really improve things,” Conroy said. “Organizations as a whole need to hold themselves more accountable to paying attention to both quality and costs of service. They need to be looking outside of the walls of the organization. We need to be really getting bold in caregiving redesign and challenging why we do the things we do. Is this the best way to get greater value and greater service?”
Sally Mason Boemer, senior vice president of finance at Massachusetts General Hospital, says she believes most hospital organizations are realizing that a change needs to happen, however, it's a matter of finding the right solutions.
“If we lower the costs of all routine services, what do we do about the unique services we offer and making those more affordable to people?” she said. “Do we back off of research? These discovered innovations could lead to cheaper care in the future. We begin moving these pieces around and realize all the underlying issues.”