Bigger is Better for Academic Medical Centers
For many academics, it looks like a classic case of the tail wagging the dog: the budgets for the health systems connected to many of the nation’s premier public and private universities now exceed those of their namesake schools. The system I lead, Michigan Medicine, for example, comprises about 60% of the University of Michigan’s budget.
The expansion of academic medical centers (AMCs) led Politico to assert that, “Universities with health systems are better understood as health systems with universities.” Echoing coverage in The Chronicle of Higher Education and other publications, Politico suggested that universities may compromise academic goals to achieve the policy aims of their health care systems.
AMCs have, indeed, become big businesses. Unlike most universities, health systems operate in very competitive local markets. What’s often lost in this discussion is that most AMCs are, in fact, money generators for their schools, not a financial drag as some argue. Their success is essential to achieving both the academic goals of their universities and the unique role AMCs serve in American health care. Unlike private health care systems, AMCs have a tripartite mission: education, research and care that harnesses the power of universities to benefit their larger communities. Expansion is necessary to maintain the financial strength required to advance the research and education that is vital to progress in health care.
The financial success of AMCs is critical to the success of patient care. We look to AMCs to provide education and training to the next generation of doctors and other health care providers. AMCs are centers of discovery, performing cutting edge research and then translating those breakthroughs into novel therapies and care for patients with complex disease and for large swaths of the population from under-resourced environments.
AMCs are expanding for many reasons. In the current marketplace, larger health care organizations are better able to negotiate with payors and providers of needed medications and medical equipment. AMCs also need to grow in response to robust competition. Countless companies – a mix of startups funded by venture capital and behemoths such as Amazon and Google – are targeting high profit areas in health care, often at the expense of AMCs. Expansion enables AMCs to hold onto to these high margin areas, so that they can continue to fund more expensive, less profitable care.
AMCs have another extremely important reason to grow – one that is connected to the advancement and quality of medicine that is often overlooked by news outlets. We are in an era of growth in our ability to tailor care to the unique genetic and biological makeup as well as the impact of their environment on the health of individuals. “Precision health” hinges on our capacity to gather and analyze vast amounts of information about millions of people. By sorting and sifting massive data sets, often with the use of artificial intelligence, caregivers can increasingly find subtle patterns and anomalies that allow us to customize more effective treatments. The success of precision health requires vast resources and expensive technologies. So, too, do the new array of effective treatments we have developed for a wide-array of ailments – for cancer and heart disease, failing joints and eyes and genetic disorders. This level of care is not available in most community-based health systems. For this reason, AMCs are, increasingly, recognized as the place to go for highly complex medical care.
To appreciate this, it is useful to compare a hospital system to a grocery store. A small store will have a limited number of products; if the one near you doesn’t have what you want, you have to find someplace that does – or just do without. A large supermarket is more likely to have everything you need.
No single hospital can be a one-stop shop like Costco or Wegman’s. But health care systems are increasingly providing their own comparable model by establishing networks of providers. These emerging networks connect a range of community-based general practitioners and specialists where people live to a few central locations with cutting edge technology and caregivers that can address the toughest cases that are passed onto them from local providers.
That is the approach is being adopted by Michigan Medicine and a rapidly growing number of academic medical centers. Last year, for example, the Sparrow Health System joined University of Michigan Health, allowing us to expand services to Mid-Michigan residents, providing increased access to the highest level of care and improving facilities and technology for the patients we serve together. This is similar to a partnership we formed with UM Health-West, formerly Metro Health, to expand services in the Grand Rapids area for the local communities. By leveraging the resources of an academic medical center as well as the community presence of local hospitals, all boats rise, particularly for patients and families.
These efforts, along with collaborations with smaller providers across the state are, indeed, making us a larger organization. But they are also helping us go small by enhancing our ability to deliver local care people can receive close to their homes. By partnering with community hospitals, we can collaborate with their care teams to offer expanded clinical programs and specialty services and enable more streamlined transfers to our main campus for the very complex cases.
We have also partnered with hospitals in other parts of the state to develop acute stroke programs, enhanced cancer care and advanced cardiac care. In underserved areas, we are providing much needed services like mobile mammography and enhanced access to highly specialized care for those who need it.
Growth presents challenges; an organization with more moving parts can be harder to run than a smaller one. But as scientific breakthroughs continue to provide doctors with ever more powerful tools to treat patients, it is important to create health care systems that can deliver that care to them. Expansion is especially crucial for academic medical centers which, unlike for-profit private institutions, have a responsibility to provide care to everyone, especially the sickest patients with the most complex illnesses.
Marschall S. Runge, MD, PhD, is Executive Vice President for Medical Affairs and Dean of the Medical School for the University of Michigan. He serves on the Board of Directors for Eli Lilly and Company.
