Faculty practice plans: the organization and characteristics of academic medical practice

The contemporary academic medical center is a complex organization providing medical and other professional health education, biomedical and behavioral research, and a comprehensive range of patient care services. This paper presents data from the Association of American Medical Colleges' 1989 survey of 125 member faculty practice plans. The survey data showed that 62% of the 74 responding plans were units or associations within the medical school corporate structure. Plans were organized along a broad continuum from the autonomous, departmental model with decentralized governance and management to the group model with centralized governance and management. The growth of managed care, increased competition, and a greater reliance by the medical school on clinical practice income as a financing source are causing the practice plan to expand beyond billing of professional fees. The survey data showed that 75% of the practice plans operated satellite centers, and 61% planned to build new ambulatory care facilities in order to expand and improve services to patients. The practice plans also have adapted to changes in third-party reimbursement and are establishing mechanisms to negotiate managed care contracts involving multiple clinical departments to increase referrals and maintain patient shares; 86% of the plans participate in at least one managed-care organization. The role of the practice plan will continue to evolve in response to the needs of the academic medical center for a cooperative and supportive environment in which to conduct its traditional missions of teaching, research, and patient care.