As the industry incorporates health reform provisions, political and financial challenges will force academic medical centers (AMC) to adjust their funding, strengthen their brands and embrace collaboration, according to a new report from consulting firm PricewaterhouseCoopers (PwC).
In fact, academic medical centers could lose about 10 percent of their revenue, thanks to lower Medicare disproportionate-share hospital (DSH) payments or failure to meet new quality standards, the report says.
As reform expands health insurance to millions of Americans, academic medical centers will need to attract these newly insured patients to make up for the shrinking DSH payments. Yet, that calls for improved brand value, according to the report.
Even though academic medical centers are some of the most well-known hospitals across the nation, they usually fall short on quality scores, hurting their reputation. For instance, academic medical centers failed to make the Joint Commission's inaugural top-performers list last fall for achieving excellence on quality care metrics, as their compliance scores missed the mark, FierceHealthcare previously reported.
With that in mind, the PwC report urges academic medical centers to enhance their brands by holding faculty accountable for cost and quality.
Academic medical centers also can build their brands globally through affiliations or acquisitions. "As the world becomes richer, people want to spend their money on education and health so it's very appropriate for AMCs to have a global strategy," Stephen M. Cohen, executive vice provost at New York's Weill Cornell Medical College, says in the report.
Reinforcing the need to capitalize on opportunities for local partnerships and research collaborations, the report recommends academic medical centers team up with with high-quality, low-cost providers like community hospitals. According to the PwC, 59 percent of consumers surveyed said they would likely seek care an academic medical center-affiliated community hospital.
To learn more:
- check out the PwC report
- read the FierceHealthcare article