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Business Officer Magazine

Prescription for Sustainability

Academic Medical Centers in a Rapidly Changing Environment was a new half-day program designed for university leaders and representatives of rating agencies and financial institutions. In several sessions, participants explored the complex interplay of the educational, research, and clinical activities of medical centers.

Panelists represented medical centers at Rutgers, the State University of New Jersey; the Ohio State University; Washington University in St. Louis; Morehouse School of Medicine; University of Washington Medicine; and the University of Kentucky College of Medicine.

In the session "Transforming Financial Strategies for Academic Medical Centers," panelists considered how to achieve a sustainable financial model in light of declining federal support for research, varied governance structures, and the different cultures of the university and the hospital.

Financial sustainability under the Affordable Care Act is a looming question for these centers. "Are we able to move from a fee-for-service model to a global at-risk model?" asked panelist John Augustine of Barclays Capital. "If you're taking care of a population of people, you're at risk under the ACA." In many cases, panelists said, the medical center is the primary health-care provider within a region.

"The research grant level is no longer feasible," said Barbara Feiner, vice chancellor for finance and CFO at Washington University in St. Louis. "Now we're relying more on philanthropy, foundations, and commercial sources." Other challenges include university governing boards unfamiliar with health care, greater emphasis on measurable outcomes, expanding affiliations to partner hospitals, and managing risk.

A second session, "Leading Organizational Change in Academic Medical Centers," focused on the regulatory and policy framework as well as strategies medical centers can use to better position themselves for change. Attendees also took part in breakout discussions and a networking lunch.

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