Emory Report

May 15, 2000

 Volume 52, No. 33

Johns details WHSC moves

Like many academic health centers, Woodruff Health Sciences Center and Emory Healthcare have had to develop strategies to deal with challenges such as decreased funding and changes in the managed care environment, according to a commentary in the May 10 issue of the Journal of the American Medical Association (JAMA) co-authored by Michael Johns, executive vice president for Health Affairs.

Johns presented the commentary at a JAMA briefing on the "Plight of the Academic Medical Center" on May 4. "Problems in the environment included the fact that commercial health maintenance organization (HMO) enrollment in metropolitan Atlanta was increasing at twice the national rate; major competitors were merging and aggressively establishing primary care networks; Emory's clinical enterprise was inefficient, not integrated and not customer friendly; and Emory Hospitals' cost structure was threatened by aggressive price competition," the article said.

In response, Johns said, Emory Healthcare adopted seven clear goals:

· capitalize on differentiation.

· improve the outpatient delivery system.

· ensure capacity and excellence in acute care delivery.

· protect and expand remote markets.

· manage care for complex populations.

· leverage the academic-clinical interface.

· create a management and governance structure reflective of key priorities.

"We have sought to clearly identify and leverage our market strengths, engage in extremely selective partnering, pursue significant administrative alignment and process improvement initiatives, and use a process of methodical supportive planning and implementation to minimize the negative aspects of change," Johns wrote.

"Equally as important are some of the roads not taken," he added, saying that Emory Healthcare did not:

· enter the home health market.

· develop an HMO insurance product.

· accept capitation contracts, except in primary care.

· accept other hospital merger or acquisition offers.

· accept an early plan to acquire a network of 350 primary care physicians.

"A big challenge for all academic health centers is persuading faculty to adopt new practice patterns that include accountability and appropriate incentives for compensation and to be more efficient in practice management and patient care," Johns wrote.

WHSC has spent more than $100 million over the last four years, Johns said, to recruit clinician-scientists and is investing more than $200 million in new research facilities.

Although most of the measurable returns on these and future investments are still many years away, in the past three years the School of Medicine already has had a 71 percent increase in National Institutes of Health (NIH) grant awards: from $55,136,662 in 1996 to $94,510,000 in 1999.

In addition, a new governance structure has been created for the clinical enterprise that includes 10 decision-making teams, each made up of about 15 members representing a cross-section of WHSC faculty and staff. Operations, clinical performance improvement, marketing, managed care, contracting, information systems, clinical research, contract/pricing and other committees work as a resource for business units and managers.

Findings and recommendations are brought to the table for the executive strategy committee, which consists of senior leadership. Each team is designed to give physicians and other clinicians in Emory Healthcare a majority voice within a transparent decision structure for the entire system.

"The paths to success, let alone survival, for academic health centers are still far from clear," Johns wrote. "At Emory we have many challenges remaining and, in a harsh environment, an array of new initiatives to manage. Nevertheless, we believe we have reasons to be optimistic that we are headed in the right direction."

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