Traditionally, academic health centers are structured around a university- or state-owned medical school, one or more affiliated or owned teaching hospitals, and an employed or affiliated physician group practice. Academic health centers may also include owned, closely affiliated, community, and specialty hospitals; nonacademic physician practices; research institutes; and other entities that contribute to the clinical and/or academic mission.

Although academic health centers vary in organizational structure and level of strategic and functional integration of their components, they generally share a commitment to a threefold mission: leading healthcare innovation and practice; advancing knowledge and improving care through research; and training the next generation of caregivers, scientists, educators, and leaders in healthcare.

Underwriting these missions is a mix of revenue streams, including income from clinical services, medical school tuition, federal payments for graduate medical education, research grants, endowment income, and in some cases state and/or university subsidies. Together, these revenue streams support programmatic growth, investments in facilities and infrastructure, and, most importantly, the people whose energy and creativity are essential for the success of the clinical and academic missions.

In the current economic environment, many of these revenue streams have been sharply reduced, and, as a result, academic health centers face major financial and strategic challenges. Ever-rising healthcare costs, coupled with the recent economic recession, have led to renewed government efforts to restructure health insurance coverage and reform the payment system (1). At the same time, a rapidly growing number of uninsured and underinsured patients has contributed to a rising tide of "bad debt" and unreimbursed care (2).

The recession has also affected state and federal tax revenues, leading to cutbacks in health-related services (including public-sector psychiatric services), along with proposals to reduce Medicaid and Medicare reimbursement to hospitals, physicians, and other healthcare providers (3). Funding for so-called "disproportionate-share" payments to hospitals that care for large numbers of Medicaid-insured and "self-pay" (i.e., often indigent) patients is also under pressure.

In the private sector, the shift toward accountability for care is changing the reimbursement environment, especially for providers of procedure-intensive tertiary care. At the same time, philanthropic support for academic health centers, in the form of gifts and endowment income, has declined, along with access to the credit and capital needed for investments in facilities and infrastructure.

Regardless of the outcome of current efforts at healthcare reform, the resources academic health centers need—to provide care for increasingly-complex patient populations, support clinical innovation, grow the clinical enterprise, and carry out their research and teaching missions—are in jeopardy. In response, many academic health centers are reexamining their missions and their use of available resources. Some are questioning their ability to sustain traditionally low-margin clinical specialties like internal medicine, pediatrics, and psychiatry, where, all too often, clinical revenues alone are insufficient to cover the full cost of caring for the patients they serve. Whereas, from a business perspective, most leaders of academic health centers accept the need to maintain a strong primary-care base and the referrals it generates for higher-margin specialties, academic departments of psychiatry must continually demonstrate their value to the clinical and academic missions of the academic health center.

Here, we examine the value proposition for psychiatry from the perspective of our experience in leadership roles in academic psychiatry and in consulting to medical school deans, hospital CEOs, and department chairs. We start from an admitted bias that psychiatry does and can continue to play an important role.

Psychiatry's Clinical Mission: Challenges and Opportunities

Across the United States, care of mentally ill patients remains chronically underfunded in public and private sectors (4). Constrained state budgets, the lingering effects of stigma, and the efforts of third-party payers and large, national, psychiatry-specific, managed-care organizations to control the utilization and costs of mental health services all play a role. Lack of insurance coverage, unaffordable out-of-pocket costs, and a general shortage of both inpatient and ambulatory treatment facilities and caregivers also contribute to the problem (5, 6). As a result, despite the passage of federal- and state-level parity legislation, access to timely and appropriate mental health care remains a significant hurdle, especially for people with severe and persistent mental illness.

Relatively high proportions of Medicaid and self-pay patients, payer constraints on service utilization and reimbursement, and the high cost of caring for patients with a complex mix of clinical, psychosocial, and economic needs make it difficult for many academic programs to generate the revenue needed to support the direct and indirect costs of service delivery—much less the incremental margins needed to support the overall clinical and academic enterprise (7). In this context, a relatively poor payer mix, coupled with traditionally low or negative margins and the absence of a significant role in generating referrals to higher-margin specialties, make psychiatric services vulnerable to cutbacks.

The current economic downturn and generally worsening hospital finances have only exacerbated these problems. As hospitals struggle to cut costs and maximize clinical and/or research revenue per square-foot of usable space, financial pressures on nonprocedure-based, low-reimbursement specialties like psychiatry have intensified, and many psychiatric inpatient units in academic health centers have closed or been transplanted to more peripheral, less costly, locations (8). These trends have reduced both treatment capacity and access to care for psychiatric patients and have reduced psychiatry's overall "footprint" in the academic medical-center setting. At the same time that academic health centers are struggling to balance their clinical and academic missions and remain financially viable, both the obligations and opportunities for academic departments of psychiatry and their faculty have increased. The following examples illustrate this point.

General-Medical Settings

In general-hospital settings, academic departments of psychiatry have a long tradition of providing consultation to our colleagues in medicine and surgery. The diagnosis and treatment of comorbid psychiatric and neuropsychiatric illness in patients undergoing complex medical or surgical procedures and the high incidence of delirium in hospitalized elderly patients alone make these services essential. Also, in complex, tertiary-care settings, psychiatrists often play an important role in managing chronic pain; assessing patients' capacity to make informed medical decisions; and supporting patients, their families, and their medical colleagues in end-of-life decision-making. Despite the relative lack of external reimbursement for many of these services, there is substantial evidence that prompt psychiatric interventions can reduce the length of hospital stays, lower treatment costs, and improve quality of care, especially for "high-complexity" patients. As a result, many tertiary-care hospitals are adopting integrated care models that, in addition to traditional bedside consultation, may include specialized psychiatric inpatient units for patients with comorbid medical or surgical problems and/or organized teams of mental health professionals who share responsibility for the care of such patients (9).

Emergency Departments

Many academic health centers are located in cities with significant concentrations of people with severe and persistent mental illness, often accompanied by substance abuse or dependence and complicated by limited access to community-based treatment, housing, jobs, and health insurance (8). Many of these patients seek treatment in emergency departments, where a shortage of appropriately trained staff and a lack of readily-available community treatment alternatives complicate the evaluation and triage process and contribute to emergency department through-put issues, unnecessary utilization of inpatient beds, revolving-door treatment, and less-than-optimal clinical outcomes (8, 10). Not surprisingly, leaders of academic health centers look to psychiatry to address these issues, and the willingness and ability of the department to do so is, for hospital administration and other department chairs (especially the chair of emergency medicine), often a key measure of the imputed "value" of psychiatry to the larger medical center community.

In response to this challenge, a growing number of academic departments of psychiatry are working with hospital administration and emergency-department leadership to develop short-stay (i.e., less-than-24-hour) crisis beds, urgent-care clinics, and a range of treatment alternatives (e.g., partial hospitalization, intensive outpatient, and specialty programs) for patients who, in the absence of these alternatives, will continue to seek care in emergency settings. For many departments, taking on this task is a substantial challenge. Among the hurdles to overcome are overstretched psychiatric and emergency faculty and residents, lack of adequately trained emergency staff, lack of dedicated/appropriate emergency-department space for the assessment of patients with mental illness, a shortage of readily available community programs for patients needing crisis intervention and stabilization, and, sometimes, a history of poor collaboration and/or conflict between departments of psychiatry and emergency services. Yet, for psychiatry, taking the lead in addressing this vexing and all-too-common problem is really not an option. From a patient-care perspective, psychiatric emergency services are, and will continue to be, a key part of the care continuum. From a political perspective the departmental contribution (or lack thereof) is highly visible, not only to patients but to academic health center leadership and our nonpsychiatry colleagues. In this context, tracking the clinical and financial effect of improved psychiatric services in the emergency department should be an important priority (11).

Community Physician Networks

As concerns about the economic sustainability of the U.S. healthcare system have increased, competition among hospitals for patients and referring physicians has intensified. In an effort to compete successfully with regional academic health centers, community hospitals and health systems are forging alliances with competitor hospitals and primary-care and specialty-physician practices. At the same time, the latter are partnering with makers of medical equipment, investors, and others who can help them expand their capacity to deliver complex medical and surgical care outside the hospital setting (12). Academic health centers are also building owned or affiliated systems of care to extend their services into the community, maximize community referrals for tertiary care, and increase their leverage in negotiations with payers.

As part of this trend, academic health centers, community hospitals, and their affiliated physician networks have embraced the "medical home" concept, in which community-based, primary-care physicians coordinate and oversee patient care and orchestrate patient referrals to affiliated hospitals, specialty practices, and regional tertiary-care centers as needed (12, 13). In most medical home models, primary-care physicians are compensated for managing the overall care of patients and monitoring the timeliness and quality of care.

These emerging care models and systems provide opportunities for psychiatry. Although it is unclear whether psychiatrists or other behavioral health professionals will ultimately be regarded as primary access providers (and compensated for this role) or considered as specialists, it is clear that as academic health centers develop community-based physician networks, psychiatric expertise will be increasingly important in supporting collaborative community-based outreach. Indeed, data from the IMPACT Program at the University of Washington (14) suggest that using a coordinated-care model that includes mental health care can ultimately reduce the overall costs of care and improve quality. The Massachusetts Child Psychiatry Access Project, which provides telephone consultation and triage for patients of nearly all pediatricians in the state, is based in several academic departments of psychiatry. The capacity to provide community-based care consultation for patients in rural areas, school settings, community residential treatment centers, and specialty programs in community hospitals and public-sector facilities (e.g., VA, CMHCs), using telemedicine and other forms of electronic communication, represents another model of distributed care with core academic support.

With more patients finding a medical home in the community, convenient and timely access to psychiatric faculty expertise will influence decisions about where patients seek care and the pattern of referrals from both primary-care physicians and specialists and help solidify the role of academic departments of psychiatry within the larger service development plan. As public and private payers move toward pay-for-performance, accountable healthcare, and other concepts designed to reward value in healthcare (e.g., good outcomes, lower costs), the availability of mental health professionals, including academic psychiatrists, in community settings will be an important factor in determining how competing health systems perform on measures of quality and access, increasing the likelihood that integrated psychiatric care will be "carved in" to the evolving payment structure (9, 15).

Service Lines

For academic health centers and their regional competitors, leveraging their clinical expertise and technology to improve care is a mission-driven and economic imperative. Many also recognize that enhanced integration of care is an essential step in improving quality and outcomes, especially for patients with complex problems requiring effective long-term management. In response, many academic health centers have developed service lines or centers of excellence organized around disease-focused specialties (e.g., cancer, cardiovascular disease, the neurosciences) (16). These entities emphasize cross-departmental, cross-disciplinary integration of clinical care, teaching, and research and often transcend or even replace the traditional departmental structure to share faculty, space, support staff, and technology across a full range of inpatient and ambulatory services. In many instances, a key variable in determining the level of clinical integration is the extent to which control over resources is housed in the service line or center, rather than in the individual participating departments. Not surprisingly, this can lead to tension among affected clinical chairs and between chairs and service line or institute leadership. Another sensitive issue is how direct and indirect costs, revenues, and financial incentives are allocated among participating physicians, departments, and the service line or center as a whole (17).

Although mental health services are a vital component of care for many patients with complex, long-term illnesses, the most common service-line opportunities for psychiatry are in the neurosciences. Although the financial sustainability of neuroscience service lines is largely dependent on reimbursement for neurosurgical and neurointensive care, psychiatry has much to contribute within the overall framework of the neurosciences. For example, early and more effective intervention in individuals with traumatic brain injury or stroke has allowed more patients to survive the acute effects of these events. With patients who are more intact and less disabled, the clinical emphasis has shifted from custodial care/life support to a rehabilitative approach that seeks to restore cerebral and/or motor function, prevent the development of longer-term disability, and manage psychosocial and behavioral sequelae. Given the high rate of depression in the post-stroke population, careful management of psychopharmacologic regimens along with periodic neuropsychological evaluation and the management of changes in mood, behavior, and cognition are vital components of care for which psychiatrists are uniquely qualified (18—20).

Other areas of clinical focus include evaluation and management of patients with various dementing illnesses, the co-management of the depression and anxiety that often accompany disorders such as Parkinson's disease, and the broad range of neuropsychiatric impairments that accompany neurodegenerative disorders, tumors, and demyelinating conditions. Other promising therapies include deep brain stimulation for depression and obsessive-compulsive disorder and, in the future, drug delivery targeted to specific brain areas, imagery-guided implants for neural regeneration (e.g., in Parkinson's disease), and gene therapies in the care of patients with disturbances in brain function (21).

Contributing to the Research Mission

Two decades of robust growth in federal support for biomedical research have come to an end. Although the recently-passed federal economic stimulus bill provides for a short-term boost in research funding, the hoped-for economic recovery will inevitably be followed by efforts to reduce federal spending. The status of longer-term support for the National Institutes of Health (NIH) is unknown at present, but individual investigators, academic departments, and sponsoring institutions are rethinking their strategies for developing and supporting research, carefully selecting the areas in which they will invest time and resources, and seeking to capitalize on institutional strengths and anticipate the priorities of potential funding sources.

Medical school departments of psychiatry have, in the aggregate, been larger recipients of NIH funding than departments of neurology and basic neuroscience, and far larger funding than departments of neurosurgery (22). Although the field has done well from this perspective, it is important to recognize that, in the neurosciences, as in other areas of biomedical research, emphasis is growing on developing cross-disciplinary research programs that link basic science with clinical and translational research. As a result, cross-departmental initiatives that blend psychiatry, neurology, cognitive neuroscience, brain-imaging, molecular genetics, cellular and molecular neurobiology, and other research disciplines are yielding new opportunities to understand how the brain functions in health and disease and to develop innovative treatment approaches for patients with a wide variety of neurologic and psychiatric illnesses (17). As part of these efforts, data derived from neuroimaging, emerging animal models of behavior, and the increasing focus on translational research should ensure an important role for our discipline in the evolving neuroscience research agenda.

In the current funding environment, growing the research enterprise is a substantial leadership and management challenge, even for departments with a strong research focus. The essential organizational ingredients usually include a critical mass of young and mid-career investigators, including graduate and postdoctoral students; funds to support "protected research time" for selected faculty and pilot projects; a process for mentoring young investigators and the inclusion of mentoring activities in the criteria for faculty promotion; and a transparent methodology for supporting people and projects and clear metrics for measuring their success.

Finding resources—to provide bridge-funding for selected investigators and initiatives, recruit faculty, and develop cross-disciplinary research collaborations across departmental lines—is a challenge for even the most experienced chairs.

To aid in this effort, a number of research-intensive departments have established dedicated research offices whose task is to identify funding opportunities (e.g., government, foundations, and industry), foster relationships between faculty and potential funding sources, and help faculty develop fundable grant applications. Some departments, often with institutional help, have developed a shared capability for collecting and analyzing patient-level data that can be used to support clinical trials and outcomes research. Finally, many psychiatry departments are working hard to expand and diversify their research funding streams; these include philanthropic support, licensing fees and royalties from technology transfer and patent development, and redefined relationships with industry.

Although the overall growth of psychiatric research has been impressive, it has been concentrated in a small number of research-intensive medical schools and departments, receiving much less emphasis (and associated funding) in those medical schools where clinical—and, in particular, primary—care is at the core of the mission (23). Yet, a higher percentage of medical students at these latter schools choose psychiatry than in the research-intensive departments. This raises several issues for leaders in the field. How do we ensure that medical students and psychiatry trainees are exposed to current techniques, directions, and advances in psychiatric research? How do we create opportunities for non—research-intensive departments to develop research portfolios consistent with their emphasis on clinical care-delivery in hospital and community settings? How can the medical school dean, the medical center CEO, and the faculty practice work collaboratively to ensure the appropriate balance among the clinical, research, and teaching missions of the academic department?

Contributing to the Educational Mission

Although students and trainees represent the future of the clinical and academic enterprise, faculty in psychiatry and many other clinical specialties (e.g., pediatrics, family and internal medicine) find their availability for teaching and mentoring increasingly constrained by the need to maintain clinical productivity and generate revenue. Adding to the challenge is the fact that in many academic institutions, teaching and mentoring remain underrecognized and underrewarded with respect to faculty compensation and promotion. Many academic health centers and their associated medical schools are concerned about this problem, but in the current economic climate, addressing it successfully is a challenging task. Nonetheless, many academic departments of psychiatry have partnered with other disciplines in developing innovative approaches to the medical student curriculum, training residents in their own and other clinical specialties, and helping prepare physicians and other healthcare professionals for careers in research and public policy. The following are a few brief examples:

Within the medical school curriculum, and in the postgraduate training of nonphysician healthcare professionals generally, a growing emphasis on the development of core competencies and the interpersonal skills and attitudes associated with professionalism, ethics, and compassionate care has provided an opportunity for psychiatry faculty to teach interviewing skills and help students develop an awareness of the complex interpersonal, psychodynamic and sociocultural factors that affect patient—caregiver relationships.

In postgraduate medical education, some departments of psychiatry play an important role in training physicians in other clinical specialties, most commonly, emergency and family medicine and pediatrics, where nonpsychiatrist physicians are often called upon to evaluate and treat patients with depression, anxiety, substance use disorders, and even acute psychosis. Moreover, the national shortage of trained adult and child psychiatrists suggests that physicians in primary-care specialties will continue to provide a significant amount of the ongoing care for such patients. In this context, their understanding of which patients can be effectively treated by nonpsychiatrists in general-medical settings is as important as developing clinical skills that cross specialty-specific boundaries.

Psychiatry's Future in the Academic Medical Center

In summary, academic departments of psychiatry have a significant opportunity to be full participants in the future of academic medical centers. Seizing this opportunity by establishing effective working partnerships with colleagues in other departments to improve care delivery, carry out funded research, and advance undergraduate and graduate medical education is a first step toward having a "seat at the table." In an environment characterized by constrained resources and changing payment systems, the "value proposition" for psychiatry needs to be more explicit than it has been in the past. As department chairs adjust budgets to address fiscal realities, revisit their strategic plans, and make difficult decisions about the investment of limited resources, they—along with the leadership of national psychiatric organizations—must continue to educate health-system, hospital, and medical school leadership about psychiatry's current and future contribution to the clinical and academic mission in the new era of cost containment and accountable healthcare.

Ultimately, successful departments of psychiatry will be those able to demonstrate their "enterprise value" and, as a corollary, develop more stable and predictable sources of revenue, tied to the achievement of goals shared by the leadership of the hospital, the medical school, the faculty practice, and the chairs.

At the time of submission, the authors reported no competing interests.