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NEJM Catalyst: Academic Medical Centers Face Unique Challenges

Teaching hospitals serve their communities in essential ways, but their financial health and overall effectiveness could be challenged by new healthcare payment policies, three Cedars-Sinai leaders write in a recent article published by NEJM Catalyst.

Payment models that reward or penalize hospitals and physicians based on the quality or cost of their care have become increasingly popular, as healthcare spending accelerates in the U.S., write the authors. While there are significant opportunities to improve the value of health care, current value-based payment models could strain academic health systems.

“Public and private insurers should evaluate the implications of these policies and should consider modifications that preserve the long-term viability, mission, and effectiveness of teaching institutions,” write the Cedars-Sinai authors.

They point out that many institutions are already improving the operational and clinical efficiency of patient care services and also updating medical education curriculum to instill trainees with a better grasp of population health and health systems science.

“Major academic centers must continue to embrace their responsibility to drive forward operational and research efforts to improve the quality of care, reduce unnecessary expenditures, and train future generations of clinicians to thrive in a value-based payment environment,” write the authors. “Academic centers must become as dedicated to advancing operational and clinical efficiency as they have been to advancing the science of medicine.”

The article was written by Teryl Nuckols, MD, MSHS, director of the Division of General Internal Medicine in the Cedars-Sinai Department of Medicine; Scott Weingarten, MD, MPH, consultant to the president of Cedars-Sinai; and Thomas M. Priselac, MPH, MHA, Cedars-Sinai president and chief executive officer.

The authors explain that academic medical centers provide high volumes of advanced care while maintaining adequate standby capacity for patients with rare and catastrophic illnesses—which adds up to increased costs compared to community hospitals. Yet many patients at teaching hospitals have limited or no insurance, low incomes and high social needs.

“Payments from Medicare and Medicaid often fall short of the average cost of providing care for these populations,” write the authors.

NEJM Catalyst is an offshoot of The New England Journal of Medicine that covers innovative ideas and practical applications for enhancing value and outcomes in healthcare.

Click here to read the complete article in NEJM Catalyst.