Major teaching hospitals in academic health systems are widely recognized for their ability to handle the most acute and complex cases. Known for their specialty and subspecialty care, they are frequently considered the regional, national, and even global brand for particular procedures or treatments.

But with today’s growing emphasis on population health management and value-based care, some of the same factors that make academic health systems famous are now barriers that put them at a distinct disadvantage.

Barrier 1: The operating model

Academic medical centers historically have concentrated their services in a dense hospital complex, often encompassing a few city blocks. While they might draw patients from a very large area, they tend not to have the geographic coverage (through partnerships or other arrangements) necessary to span the entire continuum of care. As a result, academic systems now are actively engaged in building out their footprints by aligning with other hospitals, health systems, physician groups, community caregivers, specialists, skilled nursing facilities, and home health care providers via mergers, acquisitions or other contractual relationships.

However, health systems just now starting this work might be showing up late to the game, as many high-value partners might already have committed to competing systems. Although their options may be more limited, health systems must identify, optimize, integrate, and manage geographically dispersed, cross-continuum partners to achieve short- and long-term improvement.

In addition, academic health systems are not as primary-care focused because they tend to have a large number of specialists and an inadequately developed primary-care footprint, compared with typical community health systems. This makes participating in alternative payment models difficult because populations often are attributed to providers based on the location where they receive primary care services. The accountability for performance — and the financial rewards generated — only flow to health systems that are aligned with the primary care physicians that “own” the patient.

This issue can be solved, in part, by developing and growing the primary care focus within the academic medical center and establishing a clinically integrated network of affiliated primary care practices across a larger service area.

Solution 1: Ensure that the operating model for the academic faculty and independent and employed community physicians effectively aligns service line and departmental leadership roles within a holistic, clinically integrated network.

This will require an intentional plan to welcome community physicians into an integrated care model, as well as alignment of compensation and incentive models with value-based outcomes.

Barrier 2: Improving value by reducing costs, improving quality and enhancing the patient/caregiver experience

Most major teaching hospitals must be prepared to treat the most complicated and expensive diagnoses, often with the most advanced therapies. This can significantly balloon costs when combined with underfunded vulnerable populations, such as uninsured and Medicaid patients. It also can lead to unavoidable inefficiencies, despite the hospital’s best efforts to teach cost-effective care. This dynamic is further compounded by payers using risk-adjustment methodologies that do not adequately adjust financial performance benchmarks related to this level of acuity or other socioeconomic issues and social determinants of health.

To alleviate margin pressures and other cost challenges, academic systems need to standardize and coordinate care across the continuum and develop specific initiatives that address the needs of vulnerable populations. Nonstandardized care wastes huge sums of money, with estimates of $210B per year in unnecessary services.

Even though clinical standardization is an intuitively apparent need, changing the professional culture can be hard because of the premium on individuality within academic health systems. It is difficult to effectively align academic physicians to ensure coordination and standardization with community-based physicians in a multidisciplinary team-based model — but it can, and must, be done.

Solution 2: Map and measure standardization of clinical care processes across the continuum of care, and create incentives for successful adoption.

Value-based care capabilities can help drive standardization across payers and improve efficiency for populations in which payment is less than the cost of care. This helps address margin issues and lowers the cost-per-unit of these services, as they are spread across broader populations. Point-of-care clinical decision support can be immensely helpful to ensure appropriate use of diagnostic services, from routine blood tests to advanced imaging.

Barrier 3: Changing organizational culture

Academic health systems have the mission and commitment to training the workforce of the future. But their innovation is sometimes stifled by challenges in collaborating across departments and across components of the evolving and expanding health system.

With value-based care comes an opportunity to advance interdisciplinary care models by engaging affiliated schools of nursing, social work, pharmacy, physical therapy, occupational therapy, and dentistry. By mobilizing these diverse, multidisciplinary team-based health professionals, the academic hub and the academic system are uniquely equipped to innovate new care delivery and professional clinical models. Additionally, this helps academic systems continue to create a culture of economic and academic alignment to support research on innovative care delivery models.

As the academic health system evolves to encompass more sites of care, we’re seeing growing tension between departmental structures and service line management models. It never has been more important to set aside historical claims on turf and foster an integrated, team-based clinical delivery model to deliver population-based care.

Managing the cultural aspects of market transformation in these pedigreed, historical institutions is critical. But don’t let “perfect” be the enemy of “good.” Academic medical center leaders must be willing to risk uncertainty and take steps toward driving positive change.

Solution 3: By expanding education and research missions to support the future of care delivery, academic health systems can use their unique perspective to lead change.


Closing Thoughts

Not one of these barriers is insurmountable, but academic health systems must find solutions to make the required changes.

There are several tools, methods, and training opportunities available that can bring about the necessary transformations. Many are tied to team-based care and implementing standardization in care pathways to drive the efficiency that will be needed to reduce the total costs of patient care.