John A. Kastor, MD
456 pp. Ann Arbor, Mich: University of Michigan Press; 2001. $59.50. ISBN 0472111965
In the last decade, the nation’s academic health centers have encountered forces so great and perilous that their mission and survival are at risk. These forces are economic and are being applied by managed care (HMOs and insurance companies), governmental policy (the Balanced Budget Act of 1997), and by competition from community medical centers. Kastor engagingly tells the story of how 6 of the premier teaching hospitals and the faculties of 5 of the most distinguished medical schools in the nation have tried to cope with this tumult. This informative, highly readable, and instructive volume opens with a chapter on the history of insurance for health care, an explanation of managed care, and the effects of this system on hospitals and faculties. This material provides a useful framework for understanding the impetus for the “merger mania” that swept the nation in the 1990s.
Three case studies are covered in entertaining depth: the Massachusetts General Hospital–Brigham and Women’s Hospital merger (Partner’s Health Care, Inc) under the aegis of Harvard Medical School; the New York Hospital–Columbia Presbyterian Medical Center merger involving the medical schools of Cornell and Columbia Universities in New York; and the Stanford University–University of California at San Francisco merger on the West Coast.
Each case study is preceded by a list of the cast of characters by name and position; these individuals are used as the sources for much of the information gleamed by Kastor over 18 months of research. The straightforward, honest, and often humorous commentary by some of the nation’s leading academics is skillfully interspersed in the chapters on development and formation devoted to each of the 3 case histories.
The major raison d’etre for these mergers was the desire for the academic health centers to ward off disaster. They envisioned the new corporate entities created by these mergers as being more effective at bargaining with managed care and reducing costs by combining “back office” functions such as billing and information systems, for they hoped to form robust local networks to increase the revenue stream and thus dominate the marketplace. Unfortunately, significant cost reduction turned out to be a theoretic possibility at best, especially when one factored in the expense of setting up the new centralized corporate conglomerates.
As always, the most compelling part of the story has to do with the people involved—the character sketches of the administrators, deans, CEOs, departmental chairmen, and division chiefs are brought to life as they try to mold their lives to fit the new world of corporate medicine. The human cost of the mergers is told with great skill in terms of the time stolen from productive, academic, and clinical work, which was switched to endless meetings and draining travel between campuses. At the top, many high-level academics spent up to 40% of their time in meetings on the process of the merger. The chief of Cornell’s cardiac surgery department at New York Hospital quipped that a child would formerly ask his father “are you going to operate today, Daddy?” Since the merger, this has been changed to “are you going to a meeting today, Daddy?”
In all 3 mergers, consolidation of service lines and clinical functions never materialized to any great extent: this was mainly due to the competing cultures of the faculties. The author suggests that the merger in Boston under the influence of only one medical school was the most successful of the 3, due in large part to the sufficient degree of autonomy allowed the practicing physicians. The New York merger is rated as a work in progress with significant reservation about its ultimate benefit. Finally, the University of California–Stanford merger is perceived as an unqualified disaster that dissolved after only 23 months once the red ink started to flow.
In the final chapter, the author draws broad conclusions based on the 3 case studies. He quotes one observer who noted that the merging of academic medical centers may come to be regarded with time as a “phase of development that in retrospect turned out to be a hubristic delusion of grandeur.”
I wished that Kastor would have extended his analysis to suggest alternative strategies for the leaders of academia to deal with the current crisis. Perhaps they should try to influence public perception and policy so that their vital centers might avoid being ruined by the disastrous reductions in funding that are compromising the short and long-term welfare of patients. Hopefully, this will be the subject of a future opus.