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TR: Should academic hospitals also continue to provide health care to anyone who needs it?

THIER: Yes. Both academic and community nonprofit hospitals play critical roles in providing care for the 40 million people-two-thirds of whom are working-who don’t have private insurance or governmental medical assistance for at least part of the year.

Unfortunately, as the for-profit motive in health care continues to play out we are going to end up with patient populations that are not served. Nonprofit hospitals are not going to do well compared with for-profit institutions should the nonprofits continue to provide care for those who lack any insurance. If a for-profit institution takes over a nonprofit hospital and sends the indigent who once used that facility to us, the number of people we serve at no cost rises. Economically, in this situation a private organization purchases a public asset without maintaining the public re-sponsibility of the formerly nonprofit hospital.

TR: So how can academic hospitals continue to compete with for-profits?

THIER: Partly by stressing quality. Toward that end nonprofit hospitals-particularly the academic ones-can strengthen their market position by improving their “outcomes” research.

Studies of how patients fare from their treatments indicate the quality of hospitals’ services. Because of their broader array of specialized services and pool of newly trained doctors who are up-to-date on the latest medical knowledge and techniques, academic hospitals should offer better quality than for-profit hospitals. In fact, a study of 30 hospitals in Ohio-which was recently published in the Journal of the American Medical Association-found that major teaching hospitals had lower death rates, after adjusting for the severity of patients’ illnesses upon arrival, than nonteaching and small teaching hospitals.

If you are a major employer, you can look at the outcomes research coming from the three or four health-care systems in your region and decide which system, including which hospital, offers the best quality for your employees.

TR: Aren’t employers going to base their decisions primarily on cost?

THIER: No. General Motors offers a good example. This year that company began to pay a significant amount of the cost for its employees to belong to the managed-care provider GM thinks upholds the best-quality standards on factors such as health outcomes, doctors’ and nurses’ qualifications, facilities, and convenience. GM employees can still purchase services from other groups, but they have to pay a larger percentage of the costs charged by those insurers.

TR: Could GM’s interest in quality of care be an exception?

THIER: Other entities are starting to show interest. The Cleveland business community has banded together and demanded that hospitals provide information on their complications and death rates related to medical procedures.

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