Yippee Ki Yay . . . On Academic Medical Centers

Bruce Willis.  Yippee Ki Ya, my brother.

The Chronicle of Philanthropy observed “rare disease day” yesterday with an interesting op-ed illustrating the importance, I think, of academic medical centers.  I mention this only because academic medical centers typically charge higher prices than other nonprofit hospitals, at least to their paying customers.  Not because they are huge profit wolves poorly disguised as small nonprofit sheep.  But because academic medical centers are usually where those rare diseases, for which there are often neither known cures nor even FDA approved treatments, are confronted.  Caring for people with those rare diseases while also searching for cures is exceedingly expensive, I imagine.  Higher than average fees charged to paying customers [insurers, actually], along with all sorts of other exempt revenue, subsidize the high [liability] risk and often times experimental treatments that consume tons of capital, human and financial, before being deemed effective and safe.   Covid-19, especially, put a serious strain on academic medical centers, according to one report:

“Academic Medical Centers (AMCs) are the training grounds for emerging physicians, the birthplaces of new discoveries, and the providers of the most complex life-saving care. And, as the COVID-19 pandemic revealed, they are a critical component of our public health response.  This uniqueness has historically insulated AMCs from industry turbulence and helped them maintain economic stability.  However, a number of factors including price transparency and consumer demand for access, convenience, and affordability suggests this stubborn stability may leave AMCs ill-suited to the new value equation in US healthcare.  AMCs’ unique ability to effectively deliver highly complex care is another strength, but one that will also be complicated by the pandemic. This kind of care will always be necessary, and it will always be the territory of a select subset of hospitals. This has allowed AMCs to command high reimbursements for the complex procedures themselves and often on the other care they provide, as payers are pressured to deliver high reimbursements to maintain AMC’s unique capabilities in-network.  Pre-pandemic, there were already signs that payers were becoming weary of paying elevated prices for low acuity care provided at AMCs. An Oliver Wyman analysis of several regional AMC’s hospital discharges, for example, unveiled less than 50 percent of care was considered as complex conditions, warranting tertiary level care. The common strategy of acquiring or partnering with community hospitals and negotiating higher rates across a wider range of providers has met increasing resistance, with many payers insisting on separate reimbursement structures for core AMCs and community hospitals. “

Philanthropy’s Obligation

Philanthropy in the past few years has made important strides to address health inequities in the United States, pouring millions into health organizations serving people of color, women, LGBTQ+ individuals, and rural communities. These commitments are long overdue and will help close important gaps in health, life expectancy, and quality of life.

But one important area is notably absent from these efforts. As the leader of an organization that works every day to advance the interests of the more than 25 million Americans living with rare diseases, I’d like to challenge my colleagues in philanthropy to extend their investments in health equity to this often-overlooked segment of the population.

Each year on the last day of February, people around the globe mark Rare Disease Day — a patient-led international awareness campaign that spotlights the unique challenges that confront those who live with rare diseases. For a disease to qualify as rare, it must affect fewer than 200,000 Americans — or less than .06 percent of the U.S. population. But while the odds of being diagnosed with any individual rare disease are low, the universe of rare diseases is quite large. The National Institutes of Health has identified more than 7,000 rare diseases, which together affect more than 25 million Americans and their families.

Investments in patient-advocacy organizations can help pave the way for more states to overhaul so-called step-therapy laws, which prevent rare-disease patients from gaining timely access to the prescription medications recommended by their health care provider. These organizations also fight for expanding Medicaid eligibility and other measures that give more children and low-income rare-disease patients access to necessary medical care. 

Rare diseases do not discriminate. They affect people of all genders, ages, races, ethnicities, socioeconomic status, religions, and sexual orientations. Those who live in urban areas are as likely to suffer from rare diseases as those in rural communities. On this annual Rare Disease Day, let’s ensure that every one of them is heard, recognized, and fully supported.

God speed, Bruce

darryll jones