Impact of competition and cost containment on the university hospital

Health care delivery in the United States is proceeding through rapid evolution driven by changes in how health care providers are reimbursed. The current dominant philosophy in government is to alter the health care field from a heavily regulated one to one characterized by competition. By reducing regulatory constraints and encouraging competition, government believes more efficient health care delivery will result. Health care payment systems now include the diagnosis related group method, all-payor rates and contracting for services with major insurance companies on discount, per diem, capitation and per case rates. Reduced use of resources assumes changes in the practice of medicine from an elaborate system of medical care to a more basic one. The implications are many and the possible effects severe. There will be reduced levels of support for medical education, particularly for fellows and for those beyond the third year of residency training. A decreased hospital census and the thrust to perform more services on an outpatient basis question the basic structure of medical education focused on the inpatient. Teaching hospitals will have to develop networking arrangements, a forced cooperativeness that threatens the autonomy of training and research programs. The recent entry of for-profit health care corporations into research may compromise the integrity of the university hospital as a center for clinical care, education and research.