Academic practice groups: Strategy for survival

Background. The mission of public academic health centers (puAHC) and their affiliated practice groups (APG) focuses on teaching, research, and the cl inical care of at-risk populations. Resources to accomplish this mission, h owever, are becoming scarce. For puAHC to survive and remain competitive, i nnovative strategies will need to be developed by the APG. We hypothesized that the integration of a surgical academic practice of the APG with a nona cademic integrated health care delivery system (NAIDS) in a managed care en vironment would benefit all involved. Methods. A surgical academic practice was integrated with a NAIDS in a 95% managed care market. Faculty alone provided care the first year and third-y ear residents were added the following year. To assess outcome, we collecte d benefit and cost data for the 1-year period before integration and compar ed them with the two, 1-year periods after integration. Results. In the second year of integration 1-revenues from the NAIDS referr als to the puAHC and APG increased 89% and 150%, respectively. The NAIDS' g eneral surgical and endoscopy caseload increased by 25%. Additionally, ther e was a 92% reduction in operating room technician cost with no increase in operating time per case. Finally, the third-year resident experienced a ca seload increase of 163%. Conclusions. In an environment where resources are diminishing and managed care consists of many large NAIDS that drive referrals and revenue, the int egration of a surgical academic practice with a NAIDS benefits all sharehol ders. Academic practice groups that develop strategies that leverage their competitive advantage will have the best chance of surviving in today's tur bulent health care market.