Financial Sustainability of Academic Health Centers: Identifying Challenges and Strategic Responses

Academic health centers (AHCs) play a vital role in the health care system. The training of health care personnel and delivery of health care services, especially to the most complex and financially challenged patients, has been a responsibility increasingly shouldered by AHCs over the years. Additionally, AHCs play a significant role in researching and developing new treatment protocols, including discovering and validating new health technologies. However, AHCs face unique financial challenges in fulfilling their social mission in the health care system. Reforms being implemented under the Affordable Care Act and shifting economic patterns are threatening the financial sustainability of AHCs. The authors review challenges facing AHCs, including training new health care professionals with fewer funding resources, disproportionate clinical care of complex and costly patients, charity care to uninsured and underinsured, and reduced research funding opportunities. Then, they provide a review of some potential solutions to these challenges, including new reimbursement methods, improvements in operational efficiency, price regulation, subsidization of education, improved decision making and communication, utilization of industrial management tools, and increasing internal and external cooperation. Devising solutions to the evolving problems of AHCs is crucial to improving health care delivery in the United States. Most likely, a combination of market, government, and system reforms will be needed to improve the viability of AHCs and assist them in fulfilling their social and organizational missions.