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Before the advent of managed care, academic medicine, including psychiatry, was in large part an honored institution that held itself above the rough and tumble of the marketplace. But no more.
While the inroads-and, many would say, triumph-of managed care are inescapably obvious to both physicians and the public, managed care's impact on academic psychiatry has been less publicized if no less drastic.
A study on the future of academic psychiatry, funded by the MacArthur Foundation, was published by the American Psychiatric Press Inc. in February under the title Between Mind, Brain, and Managed Care. The authors are Roger Meyer, M.D., and Christopher McLaughlin.
The MacArthur Foundation purchased 700 copies of the book so that it could be distributed free to all medical school deans and chief executive officers of academic health centers and major teaching hospitals.
Prior to the rise of managed care, the academic health center was "in an enviable position," writes Meyer in the book's opening chapter. "Knowledgeable consumers sought its specialists for care, industry valued and supported its clinical and basic science research mission, and government contributed substantial dollars to support its graduate medical education and research programs through payments based on direct costs, as well as formula payments for indirect costs." Academic health centers were often able to operate comfortably in the black, in effect subsidizing education and research.
Now, however, academic health centers have been forced to cut clinical fees to compete with nonacademic health care providers that have no need to subsidize other activities. The economics of managed care favors nonspecialist, primary care physicians, and this fact is increasingly reflected in academic medicine.
There are about 6,400 full-time faculty in psychiatry departments in the 125 allopathic medical schools in the United States, with 57 percent of the faculty being physicians.
Meyer looked at survey data from 48 departments of psychiatry and selected six case studies.
"The academic medical enterprise is at the end of the era of being able to cross-subsidize its research and education from clinical income," said AHC President Roger Bulger, M.D. "In order to survive, each of these enterprises-clinical service, research, and education-will have to function as what amounts to separate business lines."
Psychiatry, like primary care and pediatrics, "carries a large amount of the teaching burden throughout the four years of the medical school curriculum," said Meyer. "And like primary care it carries the full burden of its own practice costs for space and physician extenders," including support staff.
Medical schools must "begin to pay more attention to the actual costs of education," Meyer continued. "And that means they have to step back and decide how to best use the available resources. It's not an entitlement. They have to think about compensating those departments that do carry the teaching costs, and compensating them better," and cutting back compensation to departments that have their costs subsidized and don't carry the educational cost burden.
"The only way that you can begin to deal with this is to really have a financially driven planning effort" that looks at the costs of education and research and allocates adequate funds.
Psychiatry is now the second most research-intensive discipline in medical schools, which means it is able to generate significant income through grants from the National Institutes of Health (NIH) and other institutions, said Meyer.
Medical schools must maintain an infrastructure to make optimal use of available research grants, observed Bulger. This may lead people "to think a little differently from just running after every grant and start to consider, 'What is it going to cost us to accept this grant?,'" he added.
The up side of this is that academic medical centers will have to demonstrate more fiscal accountability based on "cost, access, and quality," the same three areas that have become the focus of concern regarding the national health care system.
"We are really going to have to start looking at the three areas of education, research, and service as separate, accountable business enterprises," Bulger asserted.
The profession must start to consider what psychiatry can do for the academic medical center, improving the cost-effectiveness of primary care by having psychiatric intervention in the primary care setting, said Meyer.
In the case studies explored for the book, Meyer found that where the department chair could negotiate with managed care on a price for both the psychiatric bed and the professional fee, managed care was more likely to use that facility. "Where the department couldn't do that and the hospital was off on its own, the department had a great deal of difficulty getting managed care contracts," he added.
One of the case studies in the book looked at the Sheppard-Pratt Health System, run by Steven Sharfstein, M.D., a former APA deputy medical director and vice president.
"In many ways Sheppard-Pratt is a special case, although one can learn from it," Sharfstein told Psychiatric News. For its first 100 years, Sheppard-Pratt was mainly a long-term inpatient facility.
"Now we're a comprehensive, outpatient-driven health system. . . .We merged our training program with the University of Maryland. We were one of the few non-university-based training programs." This was driven both by cost and a need to retain the training mission, he explained. "If we hadn't merged [our residency program], we would have been forced to abandon it."
Sheppard-Pratt benefits from an endowment that can be directed toward education, said Sharfstein. But even so, it is "a real challenge these days to balance the need for cost-efficient care, the need to be competitive in today's managed care-driven marketplace, and the need to provide quality teaching to the next generation of psychiatrists and other clinicians."
Former APA medical director Melvin Sabshin, M.D., who now teaches at the University of Maryland, has long been concerned with academic psychiatry.
"Most people are pessimistic [about the future of academic psychiatry]," Sabshin commented. "I am more optimistic than most, although I am not optimistic. It is important to find a way to try to cope with it, to struggle with it."
The academic health centers face an increasingly difficult balancing act, he observed. "It is very hard to keep the proper focus on both teaching and research. So much time is going to have to be spent coping with economic problems that it will make it difficult to give the appropriate amount of time, energy, and skill to the academic mission."
Bulger, the AHC president, summarized the challenges facing academic psychiatry in the coming century. "The message of the times is that those people who are working day to day in the vineyard of academic psychiatry must realize that there are dramatically changing funding streams that will challenge the traditional ways of doing things."