July 1996 Bulletin

Academic medical centers in trouble

by John W. Frymoyer, MD

John W. Frymoyer, MD, is Editor-in-Chief, of the Journal of the American Academy of Orthopaedic Surgeons: A Comprehensive Review.

Recently an article appeared in the journal, Academic Medicine, entitled "Preventing Academic Medical Center From Becoming an Oxymoron."1 The authors detailed the multiple economic pressures facing the nation's 125 medical schools, and their affiliated health delivery systems. What are academic medical centers? What is happening to them? What is their future? What are the implications for orthopaedic surgery? Who cares? My answers to these questions represent one person's perspective, if you will, the "View from the Trench."

What is an academic medical center? Currently, there are 125 medical schools in this country. Most, but not all, own or are directly affiliated with a tertiary care hospital. Many have major affiliations with other tertiary care and community hospitals. Most have a medical practice organization, but their structures range from rather loose patient billing services, to highly organized "integrated systems." Virtually all conduct research funded primarily by federal sources. Seventy-three are state-owned, the remaining 52 are in the private sector.

25,000 residents

Each year these 125 schools graduate 18,000 doctors. The addition of 8,000 international medical graduates (IMGs) swells the number of first-year residents to 25,000. In 1994, 70 percent of these trainees were in specialties, the remainder in primary care. The costs of the educational and research enterprise has been pegged at $21 billion.

What is happening to the academic medical centers? The simple answer is, the same events are affecting them that are affecting all physicians and health care organizations. However, the impacts are greater because the cost-base for health care in academic centers often is higher, and their missions are dependent not only on health care dollars, but on increasingly constrained state dollars, endowment incomes, students' tuition, and research dollars. These "white waters" are the result of political, government and private sector activities.

Four years ago, William Clinton ran for President on a platform featuring health reform. The theme was simple: the United States, functioning in a global economy, cannot sustain 13 percent of its gross domestic product devoted to health care, particularly when 30 million of its people have no, or inadequate, health insurance coverage. The Republican Congress, in its "Contract with America," has further focused attention on the contribution of Medicare to an unsustainable national debt exceeding $1 trillion.

Transformed system

Although "national health reform" failed, marketplace forces in the form of managed care have "transformed" American health care. Analysis of these market forces and their impact in highly-penetrated managed care environments has given a credible picture of the likely events which are and will impact health care.2 Most regions of the United States are currently moving into Stage II of the development of managed care, but advanced markets such as Minnesota and Massachusetts are now in Stage III.

Given these current and predicted changes, the academic medical centers are faced with intense pressure to change, yet often the very nature of the academic institution makes the required change particularly difficult:

These multiple factors create a view and reality that academic medical centers are in trouble. The response of centers to these market forces already is striking. Medical schools are merging - for example, Medical College of Pennsylvania and Hahnemann Medical School. Schools are partnering with unlikely spouses, for example, the for-profit hospital corporation, Columbia HCA with Tulane's, and now Medical College of South Carolina health care delivery systems. Mergers of one or another part of the academic center are imminent, for example, the reported merger between New England Medical Center and as yet unnamed partner. The forces are great enough that the American Association of Medical Colleges recently held a conference on the future of tenure. In short, there are a varied set of responses, some unthinkable five short years ago, yet strategies based on survival.

So who cares? Ultimately we all should care. These academic medical centers have trained students who become the future of health care in this nation, as well as world leaders in health. Orthopaedics, in particular, has been a recipient of the "brightest and the best" students. Academic centers also have been the principal, although not sole, drivers of major research advances, some of them immediately applicable to patient care, while others create the new opportunities for potentially dramatic curative therapies in the future. Academic centers have been those places that more often than not have trained all of us in these new therapies, operations, and diagnostic tools. Closer to home, academic centers are commonly those places where complex patient problems can be addressed, as well as a place where health care is given to those unable to pay. If they are to survive, such centers will have to change, yet there are no simple solutions.

My view from the trench has some fairly simple principles, many of which have been articulated by others:

Although some may disagree with this formulation, it is a view from the trenches, which in the words of Tom Peters is "Managing in Chaos." The good news is the survivors of this chaos will have learned to do what they do, it is hoped, better, so that our patients will continue to have access to the very best health care, and the best orthopaedic care in the world.


  1. Berns, KI: Preventing Academic Medical Center from Becoming an Oxymoron. Academic Medicine 1996;71:117-120.
  2. Integration: Market Forces and Critical Success Factors. VHA Inc., 220 East Las Colinas Blvd., Irving, Texas, 1994.
  3. Critical Challenges: Revitalizing the Health Professions for the Twenty-First Century. Pew Health Professions Commission, December 1995.
  4. Managed Health Care: Implications for the Physician Workforce and Medical Education. Council on Graduate Medical Education Sixth Report. September 1995.

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