Academic practice groups: Strategy for survival

Abstract Background. The mission of public academic health centers (puAHC) and their affiliated practice groups (APG) focuses on teaching, research, and the clinical care of at-risk populations. Resources to accomplish this mission, however, are becoming scarce. For puAHC to survive and remain competitive, innovative strategies will need to be developed by the APG. We hypothesized that the integration of a surgical academic practice of the APG with a nonacademic integrated health care delivery system (NAIDS) in a managed care environment would benefit all involved. Methods. A surgical academic practice was integrated with a NAIDS in a 95% managed care market. Faculty alone provided care the first year, and third-year residents were added the following year. To assess outcome, we collected benefit and cost data for the 1-year period before integration and compared them with the two, 1-year periods after integration. Results. In the second year of integration, revenues from the NAIDS referrals to the puAHC and APG increased 89% and 150%, respectively. The NAIDS' general surgical and endoscopy caseload increased by 25%. Additionally, there was a 92% reduction in operating room technician cost with no increase in operating time per case. Finally, the third-year resident experienced a caseload increase of 163%. Conclusions. In an environment where resources are diminishing and managed care consists of many large NAIDS that drive referrals and revenue, the integration of a surgical academic practice with a NAIDS benefits all shareholders. Academic practice groups that develop strategies that leverage their competitive advantage will have the best chance of surviving in today's turbulent health care market. (Surgery 2000;128:50-12.)