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US Academic Medical Centres 'Struggling' says McKinsey

April 15, 2024
healthcare-digital.com
Contributed by: Drex DeFord
Summary
A McKinsey report highlights the financial struggles faced by US academic medical centres (AMCs), citing cost inflation and operational complexities as major challenges. Despite substantial growth over the past five years, AMCs experience decreasing operating margins due to rising expenses, workforce shortages, and an increasingly competitive healthcare landscape with more patient care options and alternative care-delivery sites. The report suggests that AMCs need to generate significant additional margins to return to pre-pandemic performance levels and emphasizes the importance of operational efficiency and financial sustainability. It also discusses AMCs' critical roles in clinical innovation, education, and high-quality care. McKinsey's survey of AMC leaders revealed a consensus on the need for more substantial performance improvement initiatives, particularly in clinician change-management, and identified potential areas for operational optimization. The report warns that financial pressures could force cuts in education and research funding, even as some AMCs successfully improve performance through cost-saving measures and efficiency improvements, underscoring the necessity for a holistic and ambitious transformation approach to overcome these challenges.
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