Academic surgical group practices at the dawn of health reform.

OBJECTIVE

The authors collected, analyzed, and interpreted baseline data concerning academic surgical group practices as they function in the contemporary medical marketplace.

SUMMARY AND BACKGROUND DATA

Health care reform officially began with President Clinton's recent address to Congress. Features of reform, such as universal coverage, managed competition, and regulation of graduate medical education (GME) challenge academic surgery. Data relevant to the governance, financial status, and market positions of academic surgical practices are not available. A current analysis of revenue sources and uses has not been published.

METHODS

The authors used a 158-question survey to obtain information, for 1992, on adaptation to current market conditions, financial performance, and revenue uses in a sample of 100 academic surgical group practices.

RESULTS

The response rate was 83%. Seventy-four selected group surveys were analyzed. Twenty-three groups are affiliated with private medical schools; 51 are affiliated with public medical schools. Fifty-seven per cent of the groups have satellite clinic networks, and 78% own or contract with managed-care entities. Eighty-six per cent of the groups derive more than 50% of referrals from outside the academic medical center. Gross revenue median was $35 million (range $10-$101 million). Revenue growth was reported by 66%. Payer mix trends show growth in government and health maintenance organization (HMO) payers. An average of 71% of faculty salaries come from practice. Practice revenues provide 68% of department expenses and 40% of research funds. Graduate medical education is supported directly by 69% of practice groups.

CONCLUSIONS

Academic surgical group practices are vulnerable in the current marketplace. Revenue growth will be limited in the future because of weak payer mix and broad support of academic programs, including GME, using clinical income.