Succeeding in Health Care’s “New Normal”

With a tripartite mission of education, clinical care and research, academic medical centers (AMCs) have long held a unique role in higher education and health care. AMCs provide critical patient care services that often are unavailable elsewhere in communities, including trauma center, burn center and transplantation services. Furthermore, although they account for only six percent of all acute care hospitals, they train 75 percent of physicians. At the same time, AMCs are a critical component of the national safety net, providing 38 percent of all hospital charity care and approximately 28 percent of all Medicaid hospitalizations.1

In what I call the “new normal” of health care, AMCs face significant special challenges that health systems which don’t have a tripartite mission do not face. These include the rising levels of medical student debt, federal funding cuts to medical research, too few federally-funded residency training slots to address the looming physician shortage, substantial losses from Medicare revenue and cumbersome bureaucracies that, if left unchanged, will leave us further behind competitors who are able to provide the same services, but who will do so more efficiently and at lower cost.

AMCs aren’t going away – we have a critical role in research, education and health care – but, we must change and reinvent ourselves in order to survive and thrive.

We’ve navigated tough times before and we will again. Our focus must remain on innovation and rethinking how we do what we do in order to build a health care system that is more effective, safe, efficient, affordable and accessible. This is why we initiated a UMHS strategic plan in 2009 – to position UMHS to thrive and lead in health care’s “new normal.” Our strategic plan creates a roadmap for strategic action, provides a context for identifying and acting on key areas of opportunity and uses for our resources, and defines metrics by which we can evaluate our performance. Successful execution is enabling us to reach important milestones and achieve important outcomes.

We are engaging in strategic partnerships and affiliations to realize greater clinical efficiencies and better serve Michigan families with care in the right place at the right time. This includes creation of the Acute Care for Elders (ACE) inpatient unit at St. Joseph Mercy Ann Arbor, expanding UMHS inpatient services at Chelsea Community Hospital, agreements with Trinity-Michigan, Integrated Health Associates and MidMichigan Health, and our proposed affiliation with Allegiance Health. Additionally, we are on track to open our new Northville Health Center this year and provide more convenient services along the I-275 corridor.

We are negotiating with insurance payers to ensure appropriate and fair fees for complex services while preparing for how we’d survive in a “Medicare reimbursement rate only” world.

We continue to be a national and statewide leader in demonstration projects and collaborations to evaluate shared savings, patient-centered medical home models and the effectiveness of accountable care organizations, including the Physician Organization of Michigan ACO, which is helping nearly 5,000 physicians serve more than 110,000 Medicare patients in Michigan, the Michigan Primary Care Transformation Project (MiPCT) and partnerships with Blue Cross Blue Shield of Michigan.

We are in the process of changing our Medical School curriculum from one that is largely time based to one that is competency based and allows students to progress at their own pace to finish in three to five years.

A taskforce has been formed to evaluate how we might leverage the skills of physician assistants and advanced nurse practitioners in primary care to enable physicians to focus on those things they are uniquely qualified to do, and improve access and the patient experience.

We created Fast Forward Medical Innovation, which recently was awarded $2.9 million from the Davidson Foundation and last year received $2.4 million from the Michigan Economic Development Corporation to fund the U-M Michigan Translational Research and Commercialization for Life Sciences Program (U-M MTRAC). Increasingly, our Medical School is being recognized as a hub of translational research, innovation and entrepreneurship.

In the past several years we have built an impressive and talented team to lead the UMHS Victors for Michigan campaign. Funding raised via this campaign will be an important factor in offsetting some of the costs associated with research and education – the parts of our mission that depend on investment for long term lifesaving and life-changing returns. We are already 45 percent toward our $1 billion goal!

This is a just snapshot to demonstrate that this isn’t business as usual – we are in an exciting time of change and transformation. AMCs need to rethink our current cost structures and decision making processes. We need to evaluate our medical education and training curricula. And we need to continue to advocate for increased national investment in biomedical research.

I was honored to be a speaker at the MCIT all-staff meeting last week. During my presentation I encouraged attendees to be the people at the forefront of innovation and change. I asked them to be the people who discover and invent new tools and technologies that make health care more efficient, accessible, affordable and reflective of patient and family centered care philosophies. I ask the same of all of you. The key word in our vision to create the future of health care is “create.” If you really want to make a difference in the way you approach your work or impact the world, look at your work and the world in a new way – see something unique and find a better way to do it. This is our challenge and our charge. This will define the next generation of leaders and best in medicine.



1. Association of American Medical Colleges

8 thoughts on “Succeeding in Health Care’s “New Normal”

  1. Doria Chege on said:

    Thank you for your message today, I think it is a very important one for all of us, and I think that we can all work to bring this vision to reality. I so appreciate you sharing your experience with the MCIT team, having a leader like you that can include the “Front-line” as important stakeholders, I believe is so important to our success. This is often a group that can be mistakenly undervalued in regards to the changes that need to occur, and is many times the group with a great deal of wisdom that should not be over looked.
    I believe if all levels of management mirror your example, and present the process for your vision in a way that employees feel that they are a “part” of the process, that their opinions are going to be considered, and we make them “feel” as if they are an important part of the overall success of the health systems, we will achieve great gains toward our ultimate goal to “create” the future of health care.
    Thank you again for sharing this vision with all of us, I believe if we all take responsibility and remember to ask and include all levels of employee’s to “discover and invent” new ways to get their work accomplished, we will bring the most knowledge to the table and make the most successful changes needed to meet and exceed our goals.

  2. Scott McLean on said:

    I am always excited to hear that our leadership is encouraging individuals to step forward and “create” the change that will lead us to continuing as the leaders and best in medicine. However, as a memeber of the “front line” of individuals trying to better serve Michigan families I must point out that our biggest roadblock is ourselves. I could not agree more with your statement that we must address “cumbersome bureaucracies that, if left unchanged, will leave us further behind competitors who are able to provide the same services, but who will do so more efficiently and at lower cost.” We have the individuals and care teams in place to drive our institution to new levels of efficiency and productivity. What we need is a system wide willingness to allow the necessary change to take place.

  3. Charles Korte on said:

    Hear hear, Scott. It is clear to me that the self-reevaluation of our own drives that is necessary to provide a type of healthcare specifically focused on patients and streamlined processes, as opposed to the “Medicare reimbursement rate only” attitude I see in my department.

    It is difficult balance, as we must continue to compete and deal with the unique financial and academic obligations of an AMC as Dr. Pescovitz has stated. But we must continually reassert ourselves toward the reason we are here: the well-being of patients.

    On a personal note, I commend Dr. Pescovitz on striking the balance between the hospital’s financial and more socially oriented goals. It is a careful business organizing fiscal desires and moral imperatives.

  4. William B Mosher on said:

    APCs (PAs & NPs) functioning at the full extent of their licenses and training can and do fill the gaps between academic and clinical medicine in all fields of specialties.

    Better and more extensive use of these professionals is an economic solutions to many of the issues you raise without compromising or endangering patient care.

  5. David Fessell on said:

    Change and challenge means opportunity…and it’s a very exciting time to be at UMHS and in the medical world. I love that so many innovation initiatives are underway–like protein folding, host microbiome, and the Critical Care Challenge last weekend. The early funding “wins,” like the Davidson Institute and the Michigan Economic Development Corporation, are so encouraging and are builing even more momentum. Leveraging innovation strengths across the university is a great plan. I’m so glad to see the Fast Forward Initiative off to a great start!

  6. Blake Lancaster on said:

    In addition to maximizing the use of PAs and NPs, significant value can be found through integrating behavioral health specialists into primary care settings. The Division of Child Behavioral Health and General Pediatrics are currently piloting the efficacy of integrating behavioral health specialists into the primary care pediatric setting. This pilot effort has produced an increase in patient access to behavioral health services, improved pediatrician efficiency, and ultimately results in better patient outcomes as pediatricians and behavioral health specialists are able to provide true collaborative care. Our pilot data suggests that providing integrated behavioral health services in primary care pediatrics is a way of improving patient care while simultaneously producing positive financial outcomes. This model reflects the Michigan Difference as few, if any, general pediatric offices outside of UMHS offer integrated behavioral health services in Michigan. Developing the integrated behavioral health program as we expand into the I-275 corridor and renovate the Brighton Health Center is one way we can improve our pediatric primary care while achieving market growth. The Division of Child Behavioral Health is hopeful the administration will support efforts to expand the integrated behavioral health program and we welcome any potential partnerships throughout the University of Michigan Health System.

  7. Doria Chege on said:

    I have appreciated everyone’s responses; I am excited about the possibilities! I believe if we all become agents of change, each and every one of us, we will see amazing results. We have the opportunity to change the system, change our staff and change ourselves. We can identify our employees who like to “break the mold” and create the change we want to see. We must support them. Even if it does not sounds correct and appropriate at the beginning.

    We as leaders must take chances and think “outside the box”. I actually supported employees that were perceived as oppositional defiant behaviors. It is supported and discussed in the new age of change. “Constructive deviance is becoming increasingly important in businesses today because constructive deviants can bring about positive changes. Unlike much of the field of organizational behavior which focuses on managerial dysfunctions, such as resistance to change (Luthans, 2002), constructive deviants can play a central role in facilitating organizational change. Given the increased interest in healthcare reforms in the United States, it is more and more essential to examine constructive deviance in the healthcare setting”,(Robbins, D. L., & Galperin, B. L. , 2010).

    Stakeholders are essential to the change process. Implementing a change without listening to staff and involving them can affect an organizations performance in a positive or negative manner. A lack in this area can halt the change process altogether. If we as individuals and an organization take the time, energy, to seriously consider all suggestions brought to us and continually tap the intelligence of our staff we will make the changes we want to see, and I believe they will be effective and beneficial to the organization.

    I am working as a leader to improve my skills in cooperation and collaboration of the stakeholders in my areas, hoping that this will increase efficiency and performance and in turn increase revenue and expand services for the organization. I believe we are all up for the challenge. As, David said in his response “it is a very exciting time to be at UMHS”

    Robbins, D. L., & Galperin, B. L. (2010). Constructive deviance: striving toward organizational change in healthcare. Journal Of Management & Marketing Research, 51-11

  8. Celeste Castillo Lee on said:

    Humanity in Health Care. The simplicity of humanity is complicated by the reality of an AMC system’s needs and the finanical environment. Sometimes feeling in conflict. However, UMHS has tremendous wealth — it is our human capital– our smart, clever, energetic, empathetic and creative people who work bravely to be change agents & leaders in research, education and health care at a pretty scary time. I am fully confident that we will transition from system centric practices to patient centric and be rewarded on every level. Being able to play a small role in this transformation by working with others in Patient and Family Centered Care is beyond meaningful it is all I ever wanted from life.

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