Innovative Revenue Streams for Academic Medical Centers: Reaching Beyond On-Site Patient Care
This Briefing is brought to you by AHLA’s Academic Medical Centers and Teaching Hospitals Practice Group.
- February 09, 2022
- Lawrence W. Vernaglia , Foley & Lardner LLP
- Marty Brown , PYA, PC
- Marcy Cent , PYA, PC
Academic Medical Centers (AMCs) are commonly known for providing communities across the globe with comprehensive patient care, extensive research programs, and educating our future health care providers. However, the high costs for delivering these programs are challenged by continual reductions in reimbursement, resulting in AMCs operating on razor-thin margins. Some AMCs have begun to invest in new lines of business that result in innovative revenue streams outside of their “core services” to mitigate financial risk and further promote their missions by investing in the future of their programs. In fact, a number of AMCs have set quantifiable strategic targets for this growth, for example: “25% of net income coming from transformative activities,” establishing a “$500 million strategic capital fund,” and ensuring “1-2% of long-term investments are in private equity arrangements.”
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