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EXECUTIVE SUMMARY ABSTRACT The Committee on the Roles of Academic Health Centers in the 21st Century convened in November 2001 with the charge of examining the current role and status of academic health centers (AHCs) in American society; anticipating intermediate and long- term opportunities and challenges for AHCs; and recommending to the AHCs themselves, to policy makers, to the health profes- sions, and to the public, scenarios that might be undertaken to maximize the public good associated with these institutions. Technological, demographic, social, and economic trends will have a significant impact on the roles performed by AHCs. The committee believes that changes will be required in each of those roles if AHCs are to continue to meet the public's needs in the coming decades. To this end, the external environment should cre- ate a set of incentives that will clearly signal the need for change and serve as a spur for actions by AHCs. In the area of education, Congress should create a dedicated fund that can support efforts to foster innovation in the methods and approaches used to prepare health professionals; in response, AHCs will need to examine fun- damentally the methods and approaches used to prepare health professionals. In the area of research, federal funding agencies should work together to support collaborations by a mix of scien- 1

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2 ACADEMIC HEALTH CENTERS tists who do different types of research to answer the important questions of science and health; in response, AHCs will need to examine how their research programs link across the continuum of research. In the area of patient care, public and private payers and foundations should support experimentation in working across set- tings of care to redesign and restructure care processes aimed at improving the health of both patients and populations; in response, AHCs will need to create the structures and team approaches needed to focus on health for patients and populations. Accomplishing these changes will require that AHCs establish the strategic management systems necessary to create an environ- ment for innovation and enable a more coordinated and cohesive systemwide view across the multiple roles and organizations repre- sented in each AHC. These systems include improved information systems, mechanisms for accountability to measure and reward progress in meeting AHC-wide goals, and leadership devel- opment and support. As each AHC makes its own decisions on how to respond to its changing environment, it should recognize the interdependent and complementary nature of the AHCs' tradi- tionally individual roles within an overall context and commitment to improving the health of the American people. While academic health centers (AHCs) have made important contribu- tions to the health of people in this nation and internationally, there is no question that the future will present a very different set of demands on these institutions. Biomedical and other technological advances are creating a constantly expanding knowledge base that must be harnessed and applied if its benefits are to be realized. Concepts of medicine, health, and preventive care will be fundamentally redefined as knowledge from research on the human genome and other new scientific endeavors offer new treatments and the ability to customize care to meet individual needs and characteris- tics. More so than acute illness, chronic conditions are now the leading cause of illness, disability, and death and account for the majority of health resources used today (Hoffman, et al., 1996; Foundation for Accountability and The Robert Wood Johnson Foundation, 2002), they are greatly influ- enced by people's lifestyles and personal choices, opening the door for a lifelong, more integrative view of health. Information and telecommunica- tions technology is a major force in cultivating a more informed consumer and can engage patients in exerting more direction and control over their care, altering their interactions with and expectations from clinicians. Ex- panding technology and knowledge also provide opportunities for the health care system to achieve goals of much higher levels of quality and safety.

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EXECUTIVE SUMMARY 3 Moreover, health care, like all industries, is affected by globalization that speeds the transfer of knowledge, but also the transmission of disease. AHCs face significant challenges in addressing these developments. They are large and complex organizations that make available a broad and complex set of services, and function in a dual safety net role, serving the most severely ill as well as many poor and uninsured. They are concerned about the disruption of traditional funding streams brought about by mar- ketplace competition and about being placed at a disadvantage because of their higher costs due to their education and research roles. But the chal- lenges that confront AHCs as a result of the trends noted above are not purely market driven, nor are they temporary. They represent fundamental and long-term technological, demographic, and social shifts that will force AHCs to examine what they do and how they carry out their various roles. AHCs must respond to their changing environment. The choices they make have an effect well beyond their own organizations, influencing the capabilities that reside throughout the health system generally and the kind of health care the American people will enjoy. Decisions about how to train health professionals influence the clinical skills they use in practicing within the larger system. Decisions about what types of research to pursue and how to share the results influence future practice patterns and insurance policies. Additionally, AHCs receive a significant level of public support for their activities. Over the last decade, the federal and state governments have allocated approximately $100 billion to support activities in clinical educa- tion and research, as well as disproportionate-share funds to care for the poor and uninsured (Anderson, 2002). Much of this funding has gone to support the activities of AHCs, so the nation has the right to look to them for guidance and leadership in addressing the health needs of the American people. For this report, the committee views an AHC not as a single institution, but as a constellation of functions and organizations committed to improv- ing the health of patients and populations through the integration of their roles in research, education, and patient care to produce the knowledge and evidence base that become the foundation for both treating illness and improving health. Although AHCs vary in their organization and the em- phasis placed on these roles, the committee believes they all face similar challenges. Before offering its recommendations, the committee wishes to empha- size its serious concern regarding the problems facing people who are unin- sured, recognizing the relationship among a lack of insurance, difficulties in accessing care, and an individual's health (Institute of Medicine, 2001a, 2002). In addition to the health impacts on uninsured individuals and populations, AHCs that care for a disproportionate share of the poor and

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4 ACADEMIC HEALTH CENTERS uninsured bear a financial burden that may affect their ability to continue to carry out their core activities in research and education. The committee has not made a specific recommendation regarding this problem because its impact is broader than AHCs. However, we strongly urge that the ranks of the uninsured be reduced, and that AHCs devote more of their attention to the future challenges of improving the health and well-being of all people. RECOMMENDATIONS The committee offers a relatively small number of recommendations that together form a two-part strategy. The overall strategy aims to initiate a continuing and long-term process of change. First, the external environ- ment should create a set of incentives that will clearly signal the need for change in each of the AHC roles and serve as a spur for actions by AHCs. In the area of education, Congress should create a dedicated fund that can support efforts to foster innovation in the methods and approaches used to prepare health professionals; in response, AHCs will need to examine fun- damentally the methods and approaches used to prepare health profession- als. In the area of research, federal funding agencies should work together to support collaborations by a mix of scientists doing different types of research to answer the important questions of science and health; in re- sponse, AHCs will need to examine how their research programs link across the continuum of research. In the area of patient care, public and private payers and foundations should support experimentation in working across settings of care to redesign and restructure care processes aimed at improv- ing the health of both patients and populations; in response, AHCs will need to create the structures and team approaches needed to focus on health for patients and populations. AHCs will not be able to take up the challenge of making the changes called for in each role with minor adaptations or a focus on each role in isolation from the others. Adding one more course to an already over- crowded curriculum or doing one more research study will not be suffi- cient. Furthermore, because of the interdependence of the AHC roles, changes in one role affect the others. For example, improving the educa- tional experience for students involves much more than curricular reform, also requiring changes in the practice setting in which students are taught. Similarly, no one component of an AHC can make the changes recom- mended. A school can modify its own curriculum but cannot unilaterally impose more interdisciplinary approaches. Therefore, the second part of our proposed strategy addresses the AHCs themselves, asking them to examine how they organize, perform, assess, and internally support their various roles. Our recommendations call on

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EXECUTIVE SUMMARY 5 AHCs to establish systems across all of their organizations and roles to facilitate the flow of information throughout the AHC, establish and mea- sure AHC-wide goals for change, and develop and support leaders who will take on the transformations required. In developing such systems, AHCs will need to recognize the interde- pendent and complementary nature of their traditionally individual roles within an overall context that encompasses a commitment to improving the health of patients and populations. Indeed, the unique contribution of AHCs in the coming decades will lie in their ability to achieve such an integration of their roles within medicine and across all health sciences, including public health, nursing, dentistry, pharmacy, and others, to foster the health of all Americans. This integration involves more than the simultaneous provision of education, research, and patient care. It requires the purpose- ful linkage of these roles so that research develops the evidence base, patient care applies and refines the evidence base, and education teaches evidence- based and team-based approaches to care and prevention. Transforming the Roles of AHCs for the 21st Century Reforming the Education of Health Professionals AHCs have historically emphasized the education of physicians at the undergraduate and graduate levels, relying on the hospital's inpatient and outpatient settings as primary training sites. To respond to the changing needs of the population and the changing demands of practice in the 21st century, AHCs will have to play a leading role in the transformation of education for all health professionals. Recommendation 1: AHCs should take the lead in reforming the content and methods of health professions education to include the integrated development of educational curricula and approaches that: a. Enable and encourage coordination among deans of various profes- sional schools and leaders across disciplines (such as medicine, den- tistry, nursing, public health, pharmacy, social work, and basic sci- ences) to remove internal barriers to interprofessional education. b. Ensure that all teaching environments--from the classroom to sites for clinical rotations and preceptorships and practice--are exem- plars for the future of health care delivery (e.g., by modeling team-

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6 ACADEMIC HEALTH CENTERS based care and using information technology) and, in collaboration with local health care leaders, demonstrate how to improve health for populations and communities, as well as individual patients. c. Emphasize training in skills that will be needed to improve health, such as the theory and computational skills necessary to compre- hend the new biological sciences, as well as the social and behavioral sciences. d. Develop, recognize and reward those who teach and conduct re- search on clinical education. Health care practitioners will not be prepared for practice in the 21st century without fundamental changes in the approaches, methods, and settings used for all levels of clinical education. Current training of health professionals emphasizes primarily the biological basis of disease and treat- ment of symptoms, with insufficient attention to the social, behavioral, and other factors that contribute to healing and are part of creating healthy populations. The training of disciplines in separate "silos" creates bound- aries where coordination and collaboration are needed to improve health. Furthermore, there is little coordination among undergraduate, graduate, and continuing education; the result is duplication in some areas and gaps in others. Health professions training is a major factor in creating the culture and attitudes that will guide a lifetime of practice. For most health profession- als, more than half their training occurs in clinical settings rather than the classroom. The clinical setting in which students are trained must be able to demonstrate care that is patient-centered and health-improving, and to model practices that are evidence-based, continuously improving, and cost- efficient. New approaches to clinical education will be required, especially to reflect practice in interdisciplinary teams and greater use of information and communications systems. AHCs should take a lead role in reforming clinical education. Educa- tion oversight organizations (accrediting, licensing, and certifying bodies) should also work together to revise their standards, as recommended in a recent Institute of Medicine (2003a) report that calls for an overhaul in health professions education. In addition, funders should send a clear signal that reform in health professions education is important and must happen more quickly. Recommendation 2: Congress should support innovation in clinical education through changes in the financing of clinical education.

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EXECUTIVE SUMMARY 7 a. Congress should create an ongoing fund that provides competitive grants to support educational innovation. · Funds should support educational innovations such as use of clini- cal information systems, testing of new educational approaches in hospital and nonhospital settings, and evaluation of curricular and other needed reforms in clinical education. Priority for such funds should be given to those organizations that integrate the training of multiple health disciplines (e.g., medicine, nursing, pharmacy, therapy, public health, administration) and that use information technology in their clinical education programs. · To create this education innovation fund, Congress should redi- rect the portion of the funding provided for indirect medical edu- cation that exceeds the additional costs of caring for Medicare patients that are attributable to teaching activities (commonly referred to as the "empirical amount"). Availability of these funds should be contingent upon implementing innovations in clinical education and training environments. b. In addition, Congress and the Administration should promptly re- vise the current statutory framework of Medicare support for gradu- ate medical education to support more interdisciplinary, team-based, nonhospital training that aims to improve the health of patients and populations. Revisions should include consideration of whether other payers should provide specific support for the education of health professionals; examine the relationship between support for the training of physician and nonphysician clinicians; assess the appro- priate recipient of support; and identify mechanisms for account- ability for both the disbursement and the use of public funds. The committee recommends a two-pronged approach to address both short- and long-term issues in the financing of clinical education. First, the recommended innovation fund should be created using a portion of the public resources currently devoted to existing programs to initiate immedi- ate change in individual training programs. AHCs need to make changes in the content, methods, and approaches for clinical education, and support should be provided for those efforts through the innovation fund. Second, more broad-based, long-lasting changes are also needed. The committee does not question continued support for health professions education, but we believe that current methods are insufficient to support future needs and should be fundamentally revised to encourage the training of a workforce that will be prepared to work in the interdisciplinary, health-oriented, in- formation-driven models of care of the 21st century.

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8 ACADEMIC HEALTH CENTERS The committee identified three options for creating an education inno- vation fund. One was to create a new funding program. The education of health professionals is of sufficient value to society to justify the allocation of new funds to such an endeavor. Another option was to freeze current payments for graduate medical education and channel the inflationary ad- justment that would occur under the existing program into the innovation fund. Using this mechanism, about $40 million would have been made available to such a fund in 2001.1 The third option was to redirect a portion of the current funding for indirect medical education (IME) to support reforms in clinical education. IME payments to teaching hospitals are intended to support the addi- tional costs of caring for Medicare patients that are attributable to teaching activities. Analyses by the Medicare Payment Advisory Commission (MedPAC) revealed that Medicare's IME adjustment formula for 2002 is about twice the calculated estimate of these higher costs (Medicare Pay- ment Advisory Commission, 2002). For 2003, MedPAC estimates that about 2.5 percentage points of the 5.5 percent IME add-on (about $2.6 billion) is in excess of the current cost relationship (Medicare Payment Advisory Commission, 2003). In its March 2003 Report to Congress, MedPAC expressed its dissatisfaction with current payment methods that provide no accountability for the use of funds beyond the Medicare pay- ment amount related to increased patient care costs in teaching hospitals (Medicare Payment Advisory Commission, 2003). The committee does not deem it likely that an entirely new funding source could be created, and does not believe that redirecting the increment provided by inflation would provide sufficient funds to support the en- deavor. Using a portion of the IME add-on would produce a larger pool of funds to support educational innovation. The committee believes that as the primary funder of graduate medical education, Medicare has a responsibility to send a clear signal on the need for change in these programs to ensure the availability of an adequately prepared workforce that is able to meet the health needs of the Medicare population. Furthermore, as noted previously, making the types of changes in clinical education suggested here will affect patient care. It can be as- sumed, therefore, that those changes will also affect the costs of treating Medicare patients in teaching hospitals, which is the intended purpose of providing the IME percentage add-on. It is important to recognize that the committee does not recommend a reduction of overall support to AHCs. Rather, our recommendation directs 1This figure assumes that $2 billion was provided to hospitals for direct medical education costs and that the Consumer Price Index was 2 percent.

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EXECUTIVE SUMMARY 9 that AHCs have the opportunity to retain the funds and that Medicare have the opportunity to send a strong signal for change while inserting a level of accountability for the use of those funds. Although the recommendation does not represent a loss of funds to AHCs, it could represent a loss of flexibility in their use. For example, to the extent that an AHC uses IME funds to subsidize care to the uninsured, there is a risk that such services could be curtailed.2 The Centers for Medicare and Medicaid Services and MedPAC should carefully monitor the effects of the establishment of the innovation fund for any deleterious effects. Although the proposed innovation fund can provide an incentive for immediate change, current funding methods for clinical education do not adequately support training in nonhospital settings, foster interdisciplinary approaches to training, or consider the relationship between the training of physician and nonphysician clinicians. Current methods have encouraged growth in the number, size, and duration of medical residency programs and the training of specialists in inpatient tertiary settings (Henderson, 2000; Young and Coffman, 1998). For nurses and allied health profession- als (including, for example, physician assistants), current payment methods have favored programs in settings that do not train physicians and are not linked to universities. Current policies do not give either AHCs or Medicare the flexibility or encouragement to make adjustments as workforce needs change, even when clear needs are identified, such as clinicians to care for an aging, chronically ill population. State and federal policy makers con- tinue to struggle with persistent problems regarding the mix and distribu- tion of health professionals. Work on revising the current statutory frame- work to address these issues should proceed promptly while the innovation fund helps spur immediate changes. Demonstrating New Models of Care Changing health needs and changing technologies create both demands and opportunities for new models of care that are designed to improve health. Recommendation 3: AHCs should design and assess new structures and approaches for patient care. 2 This is an example that could be true for some hospitals, but not others as research shows a weak relationship between the hospitals that receive IME funds and the hospitals that serve the most poor and uninsured (Medicare Payment Advisory Commission, 2003; Anderson et al., 2001).

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10 ACADEMIC HEALTH CENTERS a. AHCs should work across disciplines and, where appropriate, across settings of care in their communities to develop organizational struc- tures and team approaches designed to improve health. Such ap- proaches should be incorporated into clinical education to teach health-oriented processes of care. b. Public and private payers, state and federal agencies, and founda- tions should provide support for demonstration projects designed to test and evaluate the organizational structures and team approaches designed to improve health and prevent disease. Demonstrations should target in particular (1) populations that are at high risk for serious illness, (2) populations that are financially vulnerable, (3) conditions that reflect disparities across the population, and (4) methods for supporting individuals' involvement in and decisions about their health. Demonstrations should encompass both financ- ing and delivery components, including the testing of organizational reforms that optimize work design and workforce management. Pay- ers should streamline the process for incorporating successful dem- onstration results into coverage and payment policies. As the health needs of people change and the health care system's capabilities expand, the potential to improve health will grow. There is clearly room for improving processes of care to impact health, as has been demonstrated for chronically ill populations, for the frail elderly, and for uninsured populations (Institute of Medicine, 2001b; Wagner et al., 1996; Bodenheimer et al., 2002; Wieland et al., 2000; Kaufman et al., 2000). AHCs should be part of efforts to conceptualize new models of care and communicate to payers and policy makers the characteristics of care models that can improve the health of patients and populations that are at high risk for serious illness and those that are financially vulnerable since these popu- lations are especially reliant on AHCs. AHCs are well positioned to demon- strate new models of care because of the intersection of patient care with their other roles. As AHCs develop the evidence base, it can be applied in patient care and demonstrate to students good patterns of practice. Developing structures and approaches that can improve the health of both patients and populations will require AHCs to examine critically the processes of care within their own care settings, and reach out to their surrounding communities to collaborate with other providers and services (including complementary and alternative health services) and with public health agencies. Within their own setting, AHCs will need to examine how to improve systems of service and care to make them safer and more effec- tive and efficient, particularly as technological advances permit new ways of designing work. The changing composition of the health care workforce, combined with shortages in some areas, will require that models of care

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EXECUTIVE SUMMARY 11 improve not only quality, but also productivity. AHCs should be using their patient care settings to test organizational reforms that can optimize work design and workforce management (including evidence-based management), thereby increasing retention of health professionals and reducing dissatis- faction with the work environment. To encourage and support innovations aimed at redesigning care to improve health, public payers (such as the Centers for Medicare and Med- icaid Services and state Medicaid programs) and private payers (such as insurance companies and managed care organizations) need to support innovations in both financing and delivery so payers can use the results and facilitate their replication in other practice settings. Payment policy is a strong influence on how care is designed and delivered, and for the most part, current payment methods do not provide sufficient recognition or reward for improving health or quality or preventing disease (Institute of Medicine, 2001). Translating the Discoveries of Science into Improved Health AHCs have been significant contributors to the enormous strides made in research in recent years. The challenge in the coming decades will be to apply those advances and new laboratory discoveries to clinical settings and community practices so their benefits will reach more people. Recommendation 4: Health-related research needs to span the continuum from discovery to testing to application and evaluation. a. AHCs should increase their emphasis on clinical, health services, prevention, community-based, and translational research that can move basic discoveries into clinical and community settings. b. Congress and the administration should coordinate funding across agencies that support health-related research including the life sci- ences (biomedical, clinical, health services, and prevention research), the physical sciences, and other sciences that advance health. More coordinated funding efforts and the criteria for evaluating funding support should foster interdisciplinary and collaborative arrange- ments that cut across departments, professional schools, and insti- tutions. Historically, AHCs have focused on basic biomedical research, with support from the National Institutes of Health. They have emphasized in particular basic scientific research, a foundation for the health-related "re- search and development" activities that make future advances possible. It is

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12 ACADEMIC HEALTH CENTERS important to maintain strong support for such research to sustain contin- ued scientific advances; however, the coming decades will require an in- creased emphasis on clinical, health services, and prevention research to translate the discoveries of basic science into clinical and community prac- tice and to improve health. Research should be aimed at answering ques- tions in a variety of areas, such as the clinical, organizational, and cost effectiveness of new therapies as well as current practices to assess what does and does not work in health care; effective methods for promoting healthy behaviors; the design of safe, efficient, and effective processes of care that are able to blend personal and preventive health practices; and methods for incorporating best practices into various clinical settings. Greater priority should also be given to how organizations can translate the findings of health services research into institutional and other settings. Asking AHCs to consider research across the continuum does not mean asking every AHC to expand its research activities. Rather, each should strategically assess its resources and capabilities to set priorities for how those resources can be applied to improve health, and to determine how it can establish and reward the collaborative, interdisciplinary approaches that characterize clinical, health services, and prevention research, and sup- port the types of collaborations needed for translating discoveries into practice. For example, applying the knowledge of genetics to care will require not only basic research to understand the mechanisms involved, but also clinical and prevention research to apply results to care, attention to issues of organizational design so providers can deliver the care, an under- standing of costs and financing to build use of that knowledge into the health system, and a focus on how to educate patients and professionals so everyone understands the potential and limitations of the resulting care. Yet each of these matters is addressed by different scientists who are funded separately, and usually by different agencies. At the federal level, health-related research is funded by the National Institutes of Health, the Centers for Disease Control and Prevention, the Health Resources and Services Administration, the Agency for Healthcare Research and Quality, the Centers for Medicare and Medicaid Services, the Food and Drug Administration, the Veterans Health Administration, the Department of Defense, the Department of Energy, the Environmental Pro- tection Agency, the National Science Foundation, and even the National Aeronautics and Space Administration (National Science and Technology Council, 2000). One example of funding for collaborative efforts has been support for research centers, such as the cancer centers program at the National Cancer Institute which funds interdisciplinary centers conducting research across the continuum that includes basic, clinical, and preventa- tive/behavioral/population-based research (National Cancer Institute, 2002).

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EXECUTIVE SUMMARY 13 Although some interagency funding efforts are in place, improved com- munication and coordination around funding programs and criteria for both programmatic and training support are needed to facilitate bringing biologists, chemists, physicists, engineers, and mathematicians together with clinical and other investigators, as well as behavioral and social scientists, communication specialists, and others from throughout medicine and pub- lic health. Creating Systems for Change Within AHCs The recommendations of this report cannot be accomplished simply by adding to the activities of current faculty and organizations, or by making minor adaptations in each AHC role. Rather, clear priorities and decisions will be necessary at the level of the overall AHC, not just its individual organizations. Because of the variability among AHCs, the committee can- not offer a simple prescription for change that would fit all. Instead, we identify several strategic management systems that will be required by all AHCs to create an infrastructure through which to develop an AHC-wide view and systems approach for change across the institution's constellation of roles and organizations. Utilizing Information and Communications Technology Information and communications technology is central to the ability of AHCs to perform their roles in the future. It is important, therefore, that AHCs make the implementation of information systems a high priority. Recommendation 5: AHCs must make innovation in and implementation of information technology a priority for both managing the enterprise and conducting their integrated teaching, research, and clinical activities. a. AHCs should have information systems that span the enterprise for integrated decision making, performance assessment, and financial management. b. AHCs need to pioneer the use of information systems for clinical purposes and incorporate their use into clinical education and re- search. Information and communications technology is central to all of the roles of AHCs. Basic biomedical research is becoming increasingly reliant on such technology. Emerging areas, such as genomics and proteomics, are based on manipulating large amounts of data. Clinical and health services research, central to translating the results of basic research into clinical

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14 ACADEMIC HEALTH CENTERS care, demand information systems for analysis, synthesis, and dissemina- tion of information. Information technology is important to clinical educa- tion as a teaching tool to provide interactive learning models, as well as a way for students to learn to practice in settings that make extensive use of advanced clinical information systems. Moreover, delivery of care and sur- veillance of health at a population-wide or subgroup level will rely increas- ingly on good information systems. Finally, information and communica- tions technology are mandatory for managing complex organizations such as AHCs to support accountability for programmatic, strategic, and finan- cial performance. More broadly, information and communications technology is required to develop the capacity to manage the knowledge and information used and produced by AHCs. Knowledge management has clear clinical applications (including, for example, access to internal and external databases, sharing of best practices, and synthesized updates of developing knowledge), as well as all the knowledge that is useful and/or essential to the proper management of institutions, teams, departments, and interdisciplinary ef- forts for conducting clinical care, research, and education (The Blue Ridge Academic Health Group, 2000). Therefore, this recommendation requires that the various components of the AHC initiate (or aggressively continue) discussions about creating the capacity for knowledge management and breaking down the barriers that inhibit the sharing of information and knowledge across the organizations and roles of the AHC. AHCs need to make the implementation of information and communi- cations technology a higher priority. Indeed, capital for such technology needs to be as high a priority as capital for new buildings and equipment. If resources for the purpose are not sufficient within AHCs, federal and state governments should consider ways to encourage the needed investments, particularly for those AHCs that face persistent financial difficulties as a result of serving as safety-net institutions in their communities. Ongoing efforts related to standards and privacy also need to move forward rapidly so that AHCs (and others) can plan and implement their information sys- tems more quickly. The committee urges the development of national data standards to facilitate the development of information and communications technology in health and its incorporation into practice, as well as interoperability of systems and comparability of data (Institute of Medi- cine, 2003). Establishing and Measuring AHC-wide Goals for Change Given the magnitude of the changes required by AHCs, it is important that clear goals be set so that progress toward making those changes can be steadily measured.

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EXECUTIVE SUMMARY 15 Recommendation 6: Both AHCs and the public should evaluate the progress of AHCs in: (1) redesigning the content and methods of clinical education; (2) develop- ing organizational structures and team approaches in care to improve health; and (3) increasing emphasis on health services, clinical, preven- tion, and translational research. a. To aid AHCs in evaluating their progress, the secretary of Health and Human Services should: · Identify broad areas of AHC performance (e.g., quality of educa- tion programs, financial accountability). · Establish an advisory group to suggest guidelines for measure- ment and examples of measures that could be used by AHCs. · Obtain information from AHCs related to the broad areas of performance and issue a report every 2 years on progress made in transforming the roles, identifying areas of success as well as obstacles encountered. b. University leaders and/or AHC boards of trustees should establish mechanisms for accountability and transparency that can be used to assess their progress toward meeting the goals established for trans- forming the roles of AHCs. Because of the functional and organizational variability of AHCs, the committee believes each AHC will need to determine its own goals and priorities, but all will need to create the structures and processes required to support AHC-wide goals and measure their achievement. AHCs will need to look across their entire enterprise to align programmatic, strategic, and financial management; understand the flow of funds; and reorient internal planning and financing arrangements to improve coordination across clini- cal departments and institutions. AHCs have traditionally focused on achieving excellence within each of their roles or organizational units, and generally do not set or measure accomplishment of such goals for the AHC enterprise (Zelman et al., 1999; The Commonwealth Task Force on Academic Health Centers, 2000a). While acceptable in stable times, making major change requires a strategic, systemwide view and coordination (Zelman el al., 1999). The challenge is that AHCs are highly complex at both the management and governance levels. Department chairs have traditionally played a very strong role in raising funds, directing budgets, controlling faculty promotion, designing and directing graduate and undergraduate medical education programs, and serving as the liaison between faculty and administration (Bulger, 1988).

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16 ACADEMIC HEALTH CENTERS The departmental structure is a key element in how an AHC functions, but can also make it difficult to build consensus around AHC-wide goals and priorities. Governance structures can vary as well. An AHC board may have oversight of the medical school but not the nursing school; it may contract with several affiliated hospitals but not own one; or there may not be an oversight board for the AHC itself, only for the individual compo- nents. AHCs will be required to make decisions at the level of the overall AHC and reallocate resources to meet explicit goals for change. Greater transparency, especially in understanding the real financial resources within the AHC and the flow of funds among schools, hospitals, practice plans, and the university, will be required throughout the AHC enterprise, how- ever it is organized. The Secretary of Health and Human Services can support such efforts by identifying key dimensions of performance and sample measures for each. This work should be done with input from AHCs, states, and groups that rely on the work of AHCs (e.g., employers that hire their trainees). The information should be designed to be useful at both the federal and the state levels. Leadership for Strategic Change Throughout the AHC Various models and approaches for undertaking major organizational change have been proposed (Kotter, 1996; Kaplan and Norton, 1996; Plsek, 2001). All emphasize the importance of having a clear vision and strategy for moving forward, and the need for creating the conditions in which change can happen and be rewarded. Organizational change does not just happen; it requires sound leadership at all levels--leadership that should be unambiguously developed, empowered, and supported. Meeting the challenges set forth in this report will require strong lead- ers at all levels of the AHC. It will be necessary to establish processes for developing AHC leaders and leadership teams that will be prepared to guide their organizations in the coming decades. Recommendation 7: AHCs must be leaders and develop leaders, at all levels, who can: a. Manage the organizational and systems changes necessary to im- prove health through innovation in health professions education, patient care, and research. b. Improve integration and foster cooperation within and across the AHC enterprise.

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EXECUTIVE SUMMARY 17 c. Improve health by providing guidance on pressing societal prob- lems, such as reduction of health disparities, responses to bio- terrorism, or ethical issues that arise in health care, research and education. To accomplish the changes set forth in this report, AHC leaders will need to demonstrate a depth and breadth of leadership unlike anything seen in the past. A major role of leadership is to adapt organizations to changing circumstances (Kotter, 1996). Leadership defines the future, aligns people with a vision, and removes obstacles to realizing that vision. The stakes are high. If AHC leaders at all levels do not have the capabilities required to deliver the results asked of them, the AHCs will not be able to effect the needed changes regardless of how generous the support they receive may be. AHCs will therefore need to invest in programs and processes for iden- tifying, preparing, and developing leaders who can generate and direct the innovations recommended in this report. In addition to leadership within their own organizations, AHCs need to demonstrate strong leadership to guide the nation toward improved health. They need to speak loudly and clearly for the actions necessary to improve the health of the public, including, for example, the provision of health insurance for all Americans. Meeting this need may be a challenge in that some actions that would improve health may not benefit a specific AHC; for example, better models of care may reduce inpatient admissions, result- ing in negative financial consequences for an AHC's hospital. However, maintaining the trust that the country has placed in AHCs requires that they speak out for the nation's health. In summary, the committee recognizes the vital role that AHCs have played to date, but has asked whether they are appropriately oriented, organized, and financed to meet societal demands for leadership in health. Our conclusion is that absent significant changes in orientation, organiza- tion, and both internal and external financing, AHCs may not succeed in fulfilling these expectations. Helping AHCs to meet the challenges of the 21st century will require public policy support, but AHCs must also em- bark on a period of critical self-evaluation and direct the enormous intellec- tual energy they house toward leading change in the 21st century.

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