Academic Medical Centers Enter the Market: The Case of Philadelphia

When health care costs were of little concern and ready access was the only issue, the 6 medical schools, 80 teaching and community hospitals, and 14,000 doctors in Greater Philadelphia were a prized local asset. But now, many of these providers are threatened financially as managed-care plans drive down prices, squeezing the cross-subsidies that support medical education, and a surplus of medical specialists finds less demand for specialty services. The area's two dominant health insurers, competing to increase the number of people who buy their managed-care products, are driving these changes. In this report, I discuss Philadelphia's evolving market and . . .