Successful turnaround of a university-owned, community-based, multidisciplinary practice network

The University of Utah purchased a 100-clinician, 9-practice multi-specialty primary care network in 1998. The university projected the network to earn a profit the first year of its ownership in a market with growing capitation; however, capitation declined and the network incurred up to a 21 million dollars operating loss per year. This case study describes the financial turnaround of the network.

In 2001, the university reconfigured the practices for a fee-for-service environment while preserving the group's multidisciplinary clinical and ancillary services. Changes included reorganization under the existing University of Utah Hospitals and Clinics system, new governance and leadership, closure of practices, creation of a billing office, new financial reporting, implementation of electronic health records, revision of physician compensation, capture of referrals, leadership and staff training, and practice reengineering.

The network as a whole became profitable in 2004-2005. Its primary care component is projected to become profitable in 2 to 3 years. The network is opening new sites strategically important to the health system.

This turnaround required commitment from senior university leaders, management with knowledge of primary care practice, retention of ancillary revenues, and management and business services specific to the network with support from other units within the university. Culture change within the group was essential. Our experience suggests that an academic health center can successfully operate a primary care network by attending to the unique needs of this challenging business. Doing so can strengthen the institution's overall financial and clinical performance and provide an important setting for teaching and research.