Academic Health Centers in Competitive Markets

Academic health center (AHC) hospitals and other major teaching hospitals have funded a portion of their academic missions through patient care revenues. Using all-payer state discharge data, this DataWatch presents information on how these institutions are being affected by market changes. Although AHCs are not as successful as other hospitals are in attracting managed care patients, competitive pressures had not eroded AHCs' financial status as of 1994. However, increasing enrollment in managed care and potential changes in both Medicare and Medicaid suggest that pressure on the financing of these institutions' social missions will continue to grow over time.