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The nation's health care delivery system is changing as the federal government and private insurance groups struggle to control health care costs. With the demise of the federal government's attempts at comprehensive health care reform, the U.S. has allowed the marketplace to devise mechanisms for controlling health care costs. As a result, academic medicine finds itself in an increasingly difficult bind.
This huge, loosely coordinated enterprise includes the nation's 125 medical schools and several hundred "teaching hospitals" at which residents are trained by some 70,000 full-time faculty members. It is responsible for educating and training physicians, conducting the majority of breakthrough medical research and providing medical care to the poor and patients with severe and complex diseases.
Academic medicine is adapting to the market-driven health care delivery system but is concerned about fulfilling its core missions. Teaching hospitals, medical schools and practicing medical faculty recognize the need for change within their own organizations and are actively engaged in reformulating the health delivery system, finding ways to reduce the rate of increase in costs, improving accountability and enhancing the quality of care.
But the ability to fund their mission-related costs is eroding. For decades the government contributed to the cost of medical training. In addition, through an agreed-upon system, teaching hospitals charged insured patients enough to cover some of the educational and research costs as well as the costs of treating the poor and the uninsured. In a price-conscious delivery system, however, private insurers increasingly limit payments to only those specific services that their enrollees receive. Teaching hospitals are increasingly unable to command higher prices for their services. Medicare and some state medicaid programs, which traditionally have recognized costs associated with the special missions of academic medical centers, are retreating from covering these added costs in their payments.
What should we do to preserve the intellectual quality and financial stability of the academic health centers? First, we must recognize that the present system has produced neither the number nor the kind of generalist physicians that society may need in a reconfigured health care system. We should adopt as a national goal the committment by a majority of graduating medical students to careers in family medicine, general internal medicine and general pediatrics. All of our medical schools must adjust their policies to encourage students to seek careers in these fields. Personal incentives 2Dsuch as loan forgiveness, tax benefits and other inducements to narrow the income gap between generalists and specialists 2Doffer the best hope for increasing the number of graduates entering generalist disciplines.
Medical schools have implemented programs to increase the awareness and attractiveness of generalist medicine. More schools are adding required clerkships in one of the generalist disciplines during the third and fourth year of the curriculum. Schools have convened primary-care task forces, appointed new associate deans for primary care and developed departments of family medicine and divisions of general internal medicine and general pediatrics.
Although data on medical students' career choice from as recently as the graduating class of 1989 showed a declining selection of the generalist specialties, recent data suggest that graduates are responding to changes in the health care environment. Of graduating medical students, more than 26 percent indicated an intent to choose a generalist career in 1994, compared with fewer than 15 percent in 1992 and 20 percent in 1993. Data from 1995 show that more than 2,000 graduating seniors, or 15 percent of those seeking first-year residency positions, went into a family-medicine residency.
Like teaching hospitals, medical schools finance their activities through a complex system of cross-subsidization. Education, research and patient care exist as joint products. The costs of medical-student education (pre-M.D.) in the clinical setting are not recognized explicitly by any payment system. Like other academic costs, the clinical education of medical students has been financed indirectly through patient-care dollars. Medical schools derive minimal support from tuition, fees and state appropriations. Tuition accounted for only 4 percent and state appropriations for only 12 percent of total medical school revenues in 1991-92.
Education and research programs rely in large part on revenues from the delivery of medical services by the schools' faculty. Clinical faculty-practice plans accounted for 32 percent of total medical school revenue in 1991-92; by contrast, in 1980-81, revenues from faculty practice contributed only 16 percent.
Teaching hospitals also support their affiliated medical schools by paying for faculty services provided to the hospital. Payments from hospitals have increased from 6 percent in 1980-81 to 11 percent of total medical school revenues in 1991-92. Research income from federal and local grants and contracts supplied about one-third of the total medical-school revenue in 1991-92. Philanthropic support supplements these sources but contributes minimally to the costs of medical education. Schools do benefit, however, from an elaborate system of nonpaid voluntary faculty drawn from local communities.
Medical schools are having difficulty sustaining this complex financial system. Federal support for research is increasingly constrained, with schools expected to accept a greater share of the costs. Pressures on medical costs are likely to lead to declining income from faculty clinical practice. To preserve the patient base critical for medical education and research, faculty physicians are being lured into networks with affiliated teaching hospitals and are being asked to accept discounted payments from private payers. Furthermore, community physicians who used to contribute their time for some teaching are no longer as willing or able to do so because they are under pressure to limit their time to the cost-conscious managed-care plans that employ them.
National policy on health care delivery and payment must recognize the unique characteristics and diversity of U.S. teaching hospitals and academic physicians if their fundamental missions are to be preserved at the present high standard. Academic institutions cost more to operate than do community hospitals. But they offer society the benefits that come from high-quality medical education and research.
Richard M. Knapp, Ph.D. ('87) is executive vice-president of the Association of American Medical Colleges and director of its Office of Government Relations.
Jordan J. Cohen, M.D. ('94) serves as president of the Association of American Medical Colleges, which represents 125 medical schools, 400 teaching hospitals and more than 90 academic and research societies.
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