The University Hospital Consortium, a not-for-profit alliance of 65 academic medical centers, faces challenges as formidable as those of its member institutions.
"We deal with teaching, research and patient care, and to produce three things simultaneously is a very daunting task," said Christine Malcolm, who was hired last year as UHC's first vice president for managed care.
The Oak Brook, Ill.-based UHC has diversified from a joint-purchasing cooperative when it was formed in 1986 to an organization with an increasing emphasis on helping members deal with managed competition.
"We are encouraging our members to be proactive in anticipating their healthcare environment," said Ms. Malcolm. She joined UHC in October after 71/2 years as vice president of planning and corporate development at University of Chicago Hospitals. She also has been a healthcare consultant in the Chicago office of Coopers and Lybrand, an accounting and consulting firm.
Efforts to help academic medical centers enter the managed-care marketplace have brought UHC a dozen new members in the last year.
With more than 36,000 licensed beds and 193,000 employees, UHC members annually have about $14.5 billion in annual gross operating expenses, 6 million admissions and 11 million clinic visits.
Increased interest in UHC may be an indication of the uncertainty academic medical centers face with healthcare reform. The Clinton administration has told teaching hospitals they'll continue to receive a premium for the care they provide, but that doesn't guarantee that they'll continue to get patients. Accountability, affordability and value will determine the fate of many teaching hospitals.
Academic medical centers are learning the value of staying abreast of their markets. The private marketplace already has forced them to make some changes.
"Change for academic medical centers takes time, but the places that train tomorrow's physicians should craft their response first," Ms. Malcolm said. "We have a training commitment. We've got to get in early."
In guiding academic medical centers through managed care, UHC identified a four-stage process called the "market evolution model" (See chart, this page).
Traditional reliance on getting patient referrals lasts only through the first two stages, where HMO penetration is less than 30%. As HMO enrollment approaches 50% in stage three, specialist and physician fees are increasingly less important.
"Specialist practices are underutilized and fees are heavily discounted," UHC said. "Risk-based reimbursement, bundled pricing and capitation become more prevalent, and purchasers begin to measure their expectations in terms of cost per covered life."
In the final stage, integrated hospital-physician systems compete to provide comprehensive services to a defined population. Payer alliances with major providers are solidified.
Of UHC's members, only the University of Minnesota Health System is placed in the last stage of managed competition.
The Minneapolis market showcases what more academic medical centers will experience in the future: HMO penetration of more than 50%, direct employer-provider contracting, physician-hospital organizations and large multispecialty physician groups.
Markets where managed competition isn't the dominant vehicle could give academic medical centers an excellent opportunity to take charge, Ms. Malcolm said.
However, academic medical centers first must slash costs to come close to the prices of their community hospital counterparts, she said.
"Of those issues facing the academic medical center in the maturing marketplace, the high cost of care is among the most pernicious and intractable," UHC said.