HOW SUCCESSFULLY CAN ACADEMIC FACULTY PRACTICES COMPETE IN DEVELOPINGMANAGED CARE MARKETS

The author investigated the range of competitive options available for academic faculty practices and their associated academic medical cent ers located in health care markets with relatively limited development of managed care plans. Using personal and telephone interviews, he st udied two such markets in 1994, one in Philadelphia, Pennsylvania, and one in Atlanta, Georgia. Representatives of faculty practices in thes e cities were asked to assess whether their practices would be attract ive or unattractive for contracting with managed care providers; eight attributes of faculty practices (e.g., specialist physicians' availab ility within the group; prices services offered by the group) were use d as criteria. Similarly, representatives of local managed care plans were asked to use the same criteria to indicate what they would consid er attractive or not in their local faculty practices when considering a physician service contract with such a practice. In both markers, t he image of the academic medical center was generally considered to be a strong asset to the faculty practices. But all sectors also agree t hat the nature of practices' utilization management and what was seen as their excessive use of resources in the academic environment were c auses for concern. Also, the difference between the practice patterns of managed care physicians and academic faculty physicians was regarde d as a cultural one in which traditional patterns of academic training are considered inimical to fostering the prudent management of patien ts. The findings strongly suggest that opportunities for faculty pract ices to negotiate with health care environments still exist in develop ing markets throughout the United States. But even those practices wit h such opportunities cannot succeed without significant internal restr ucturing to transform themselves to successfully deal with the new wor ld of managed care.