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Challenges of Becoming a Regional Referral System: The University of Kentucky as a Case Study

Edwards, Robert L. MBA; Lofgren, Richard P. MD, MPH; Birdwhistell, Mark D. MPA; Zembrodt, James W. MBA; Karpf, Michael MD

doi: 10.1097/ACM.0000000000000114

The U.S. health care system must change because of unsustainable costs and limited access to care. Health care legislation and the recognition that health care costs must be curbed have accelerated the change process. How should academic medical centers (AMCs) respond? Teaching hospitals are a heterogeneous group, and the leaders of each must understand their institution’s goals and the necessary resources to achieve them.

Clinical leaders and staff at one AMC, the University of Kentucky (UK), committed to transforming the AMC into a regional referral center. To achieve this goal, UK leaders integrated the clinical enterprise, focused recruitment on advanced subspecialists, and initiated productive relationships with other providers. Attracting adequate numbers of destination patients with complex illnesses required UK to have a “market space” of five to seven million people. The resources required to effect such progress have been daunting. Relationships with providers and payers have been necessary to forge a network. These relationships have been challenging to establish and manage and have evolved over time.

Most AMCs are not-for-profit public good entities that nevertheless exist in an industry driven by competition in quality and cost, and therefore scale and access to capital are paramount. AMC leaders must understand their institutions as both part of an industry and as a public good in order to adapt to the changing health care system. Although the experience of any particular AMC is inherently unique, UK’s journey provides a useful case study in establishing institutional goals, outlining a strategy, and identifying required resources.

Mr. Edwards is director, Strategic Initiatives, UK HealthCare, Lexington, Kentucky.

Dr. Lofgren is senior vice president and chief clinical officer, UHC, Chicago, Illinois.

Mr. Birdwhistell is vice president, Administration and External Affairs, UK HealthCare, Lexington, Kentucky.

Mr. Zembrodt is director, Strategic Planning and Decision Support, UK HealthCare, Lexington, Kentucky.

Dr. Karpf is executive vice president, Health Affairs, University of Kentucky, Lexington, Kentucky.

Editor’s Note: A commentary by R. Azziz appears on pages 208–211.

Funding/Support: None reported.

Other disclosures: None reported.

Ethical approval: Reported as not applicable.

Correspondence should be addressed to Dr. Karpf, Office of the Executive Vice President for Health Affairs, 900 South Limestone, 317 Wethington Building, Lexington, KY 40536-0200; telephone: (859) 323-5126; e-mail:

© 2014 by the Association of American Medical Colleges