D. Blumenthal et al., Academic health centers on the front lines: Survival strategies in highly competitive markets, ACAD MED, 74(9), 1999, pp. 1038-1049
The authors describe approaches that live academic health centers (AHCs) ha
ve taken to reduce costs, enhance quality, or improve their market position
s since the onset of price competition and managed care. The five AHCs, all
on the West Coast, were selected for study because they (1) are located in
markets that had been highly competitive for the longest time; (2) are com
mitted to all the major missions of AHCs; and (3) own or substantially cont
rol their major clinical teaching facilities.
The study findings reflect the status of the five AHCs during the fall of 1
998. Although some findings may no longer be current (especially in light o
f ongoing implementation of the Balanced Budget Act of 1997), they still pr
ovide insights into the options and opportunities available to many AHCs in
highly competitive markets. The authors report on the institutions' financ
ial viability (positive), levels of government support (advantageous), and
competition from other AHCs (modest), They outline the study AHCs' survival
strategies in three broad areas: increasing revenues via exploiting market
niches, reducing costs, and reorganizing to improve internal governance an
d decision making, They also report how marketplace competition and the str
ategies the AHCs used to confront it have affected the AHCs' missions. The
authors summarize the outstanding lessons that all AHCs can learn from the
experiences of the AHCs studied, although adding that AHCs in other parts o
f the country should use caution in looking to the West Coast AHCs for answ
ers.