The new academic health center hybrids: part business, part academic

Academic health centers have flourished since the 1960s and even managed to survive the shift toward prospective payment. But in their current quest to expand the number of managed care patients and compete with the private sector, they often must price services below cost and reduce the number of faculty members and other personnel. Unless their prices are competitive, managed care companies will not do business with them. AHCs that cannot compete find they are overbedded, underused, and in turmoil. This article explores what successful AHCs are doing to stay healthy in the managed care era.