The Academic Medical Center Model is Broken. Here's How to Fix It.

Philip Betbeze, August 10, 2017

The CEO of Banner UMC Phoenix is counting on a ground-up redesign of the academic medical center model—from the healthcare consumer's point of view.

The academic medical center may be an endangered species.

Steve Narang, MD
Steve Narang, MD

According to Steve Narang, MD, it's the healthcare business model most at risk for failure, because it's monolithic, highly complex, difficult to change, and expensive.

Indeed AMCs have been struggling in recent years, relative to their highly profitable history.

Narang should know, because he runs an academic medical center, specifically, Banner University Medical Center Phoenix. But they can be reformed, he insists.

As the medical center's CEO, he expects disruptive changes to the AMC model in the coming years. So instead of waiting for an emphasis on customer service and value-based principles to force radical change on the organization, Narang wants to help precipitate it.

Redesign and Restructuring

Redesign of its academic medical center business model is important to Banner Health, the 28-hospital, six-state health system, because it signed a 30-year affiliation with the University of Arizona College of Medicine. More than a billion dollars has been invested in three academic medical centers in Phoenix and Tucson.

Not only that, but Banner has had a rough go of things financially in recent times. It completed a restructuring that eliminated nearly 1% of its workforce, including senior management positions, at least in part due to losses from its insurance arm.

Philip Betbeze

Philip Betbeze is the senior leadership editor at HealthLeaders Media.

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