UCSF CEO Urges Academic Medical Centers to Embrace Profound Changes

Financial Challenges Put Academic Medicine in 'Great Peril,' Mark Laret Says

By Lisa Cisneros on June 03, 2013

Mark Laret, chief executive officer of UCSF Medical Center and UCSF Benioff Children’s Hospital, says academic medical centers “must embrace profound, meaningful changes to time-honored, treasured and now increasingly ineffective and unaffordable ways of carrying out our missions.”

In a May 3 address at the University of California's Center for Health Quality and Innovation Spring Colloquium, Laret said the crisis facing academic medical centers today is “really a great opportunity if only we have the courage to grasp it.” He called for sweeping changes from the way faculty scientists are promoted to how medical students and residents are trained.

Academic medical centers provide complex care to the sickest patients, conduct cutting-edge research and train the next generation of health care professionals. But society is demanding that academic medical centers do more, do it better and do it at dramatically lower costs, Laret said.

Mark Laret, chief executive officer of UCSF Medical Center and UCSF Benioff Children’s Hospital.

“Individually and collectively we will continue to fend off [National Institutes of Heath] NIH, Medicaid, Medi-Cal cuts, bolster support for education, temper regulatory expectations, but let’s just really be honest about it,” he said. “The overwhelming political and economic sentiment today is that our nation spends far too much on health care. Along with the economic downturn and fervor to reduce federal deficits, the fact is that few of our advocacy efforts are likely to yield more than modest tweaks around the edges. The die has really been cast.”

A national expert in health care, Laret is well versed in the myriad and mounting issues facing academic medical centers having served as a hospital executive for 15 years at UCLA, five years at UC Irvine and the past 13 years at UCSF Medical Center, which consistently ranks as one of the nation's best hospitals.

Laret delivered a call to reform in November 2012 before the 123rd annual meeting of the Association of American Medical Colleges (AAMC) — the last in his role as board chair of the association of 143 medical schools and more than 400 teaching hospitals.

“What I have seen over the years, as many of you, is that we are doing an extraordinary job in academic medicine to alleviate suffering, improve the quality of life for people not just in our local communities, or in California, but around the world. We are leading the way in discovery in individual and community health, and we have done an extraordinary job in training the next generation of caregivers to provide the highest level of care and caring. It really is a remarkable story.”

But despite the great work that academic medical centers do, Laret said, “Our world in academic medicine is at great peril.”

To move forward, Laret said, substantial changes must be made across the board in research, medical education and training, patient care and in the way that the academic medical centers are organized. For example, in the area of research, team-based science should be rewarded and partnerships with industry fully explored.

In medical education and training, accreditation should be based on competency rather than based on time. Residencies should include cross-training among specialties to prepare future caregivers to practice interprofessional, team-based care.

And health care should be transformed to more cost-effective models that are less dependent on revenues generated from inpatient care and instead look toward other models like home-based and hospice care.

The UC system itself should consider more collaborative approaches across its five medical centers, six medical schools and examine whether curricula and faculty members can be shared.

Academic medical centers, Laret pointed out, are no strangers to change and have already adopted practices that have dramatically improved the quality and safety of patient care. But more must be done and the time to act is now, he said.

Myriad Financial Challenges Ahead

Laret noted that the 10-campus University of California system has suffered from unprecedented cuts to support education. State support to the UC system has fallen by more than 30 percent and there is no realistic prospect that that financial support will ever return.

"We see at UCSF that we are losing medical students to Harvard, Stanford and Penn because it's cheaper for students to go there with the endowments and support that they will have there than it is to pay out-of-state tuition that they would have at UCSF. Across the nation and across UC, tuition and student debt are at an all time high."

Inflationary-only increases in funding from the National Institutes of Health is a best-case scenario, he pointed out, which is discouraging the best and brightest young scientists from pursuing academic careers.

Clinical income is under siege, Laret added. Medicare and Medicaid already fail to cover the cost of providing care in teaching hospitals. Professional reimbursement from these payers is so low that many physicians no longer see Medicaid patients, Medi-Cal patients or Medicare patients.

“Yet in every deficit reduction program, everyone, Medicare and Medicaid budgets will be significantly cut,” he said.

And cuts to disproportionate share payments that have been extremely important to the five UC medical centers are looming, indirect and direct medical education supplements are under attack and the new insurance exchange threatens to displace commercial payments that have bolstered academic medical centers and most teaching hospitals around the country.

“Clinical income now covers not only the cost of operating our clinical enterprises, but increasingly it’s covering the cost of the education and research mission," Laret said. "As clinical income falls, the entire academic enterprise of each of our centers is threatened as never before. And this is only a partial list.”