Academic Physiatry: Not-for-profit vs. For-Profit educational entities
By Joel A. DeLisa, MD, MS
There are three sections to the American healthcare economy: Government, not-for-profit (NFP), and for-profit (FP). The government and NFP entities are society’s safety net, where society goes to solve social problems and to protect our values and culture. There are fundamental differences in the purpose of NFP and FP healthcare organizations. NFP is primarily responsible and accountable to their communities and populations in which they serve. They are legally bound to “do well” for the benefit of their communities. Benefits include the provision of unprofitable healthcare services, including trauma care, burn care, and preventive services.
They charge no fees or discounted fees to the uninsured, low income, or medically indigent individuals for their services. NFP provides support for medical education and research. NFP hospitals do not pay state or local property tax or federal income tax because they are considered a charity. FP healthcare organizations pay these taxes.
FP healthcare organizations are primarily responsible and accountable to their owners and/or stockholders. Their primary goal is to make a profit. FP healthcare performance can most simply be measured by their profitability and return of equity to their shareholders. Both FP and NFP institutions must produce a high quality product to stay competitive in the market place. However, the difference between these two types of institutions lies in their mission, support of academics, and use of surplus revenue. In the case of a NFP medical school, all surplus revenue is returned to the institution to be used for improvement of its faculties, expansion of its programs, and research. It is fair to ask where FP medical schools draw the line in conducting research and education.
The Liaison Committee on Medical Education (LCME) states that a medical school should be a NFP institution. On the other hand, the Commission on Osteopathic College Accreditation (COCA) states that an osteopathic medical school can be either a FP or NFP. In 2007 the Rocky Vista University College of Osteopathic Medicine (RVUCOM) became the first FP medical school in the United States since 1930. The Burrell College of Osteopathic Medicine located on the campus of New Mexico State University has provisional accreditation and is also a FP. There are about 162 allopathic medical schools and currently two are FP; Ponce School of Medicine in Puerto Rico and the California Northstate University School of Medicine.
The Association of American Medical Colleges (AAMC) lists approximately 420 Council of Training Hospital and Health Systems (COTH) teaching hospitals. Seven of them are FP and include George Washington University Hospital, University of Oklahoma Medical Center, Tulane Medical Center, Hahnemann University Hospital, St. Christopher’s Hospital for Children, Detroit Medical Center, and the Saint Louis University Hospital. FP entities are becoming more common.
Physiatry academic departments have two FP corporations. These are Health South (Missouri, Virginia, Vanderbilt, and Puerto Rico) and Select Medical (West Gables Rehab Hospital, Miami with Larkin Community and Nova Southeastern University; Baylor Institute for Rehabilitation with Baylor University Medical Center, Austin; Penn State Rehabilitation Hospital with Penn State College of Medicine; Kessler Institute for Rehabilitation with Rutgers-New Jersey Medical School; Cleveland Clinic; California Rehabilitation Institute with UCLA, Cedars Sinai Medical Center and Greater L.A.V.A.; and Honor Health Rehabilitation Hospital.)
The challenge posed is how to integrate the two FP and NFP entities and for the PM&R Department Chairpersons to manage the potential conflicts of interest. Some chairpersons have experience resolving potential conflicts with research funded by private industry. Are they handling this satisfactorily? Medical school PM&R Departments must have an academic mission. Education must be a top priority for these FP organizations, whether it is medical students, residents, clinical fellows, post-doctoral fellows, continuing medical education, and/or allied health. Should academic PM&R Departments exist without a residency program? How does one evaluate whether the FP invests in the academic mission?
I believe these are important questions. There is no doubt that FP organizations will play an increasing role in this nation’s medical education. The real issue is how to blend these two different entities to the benefit of society and especially, our patients. It is my hope that this editorial will stimulate this discussion.
Respectfully Submitted,
Joel A. DeLisa, MD, MS
Dr. DeLisa is the Editor of the AAP Newsletter. This article was originally published in the Physiatry Forward Summer 2016 issue.
The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of the Association of Academic Physiatrists, the AAP staff, and/or any/all contributors to this newsletter.
