In Brief
- Academic medical centers (AMCs) are facing ongoing pressures with competing priorities, changing funding sources, retention and talent, and disconnected technology, making it harder to deliver on their missions.
- To move forward, they can diversify revenue, strengthen staff development and culture, align governance, modernize data systems, and prepare for risks with greater agility.
- Long-term success rests on bringing strategies together, using institutionwide data, and relying on nimble leadership to guide faster decision making.
AMCs operate at the intersection of healthcare, higher education, and research, resulting in complexities and challenges that are distinct from other industries and organizations. While unique, we have seen that many AMCs are sharing common challenges. One of the underlying themes across all AMCs is the need to better drive performance, agility, and alignment across the three domains. To do this, AMCs are increasingly looking to Workday's enterprise solutions. At Huron, we have found success in enabling Workday to provide the infrastructure needed to streamline operations, enhance decision making, and support long-term transformation. Below are five observed challenges and strategies specific to AMCs:
1. Disparate technology systems
AMCs often struggle with siloed data and reporting due to the fragmented nature of their technology systems. This fragmentation arises from the distinct, disconnected, and varied enterprise technologies used across the finance, human resource, student information, planning, supply chain, and research operational pillars. Each of these solutions leads to increasing cost and challenges in data integration and unified reporting. For instance, the health system may use shared general ledger structures and reporting mechanisms differently from those used by the academic enterprise, which complicates efforts to gain a comprehensive view of the organization's performance.
This lack of cohesion not only hampers efficient decision making but also makes it difficult to respond swiftly to changes and align strategic goals across the institution. As a result, AMCs are increasingly looking toward Workday to consolidate data, enable AI capabilities, and enhance collaboration across their diverse functions.
Actions to take:
- Unify data across missions with a single cloud ERP: Workday enables AMCs to consolidate disparate operational systems across clinical care, research, and education into a unified system to allow for standardized data structures, AI insights, and gain a comprehensive view of performance.
- Establish enterprisewide data governance and stewardship: Data governance models, including standardized definitions, stewardship roles, and shared reporting.
- Enable transparent and collaborative reporting structures: With Workday's comprehensive data structure, analytics, and dashboard capabilities, AMCs can solve mission-specific and dual reporting needs by providing a single source of truth.
2. Federal financial pressures
Recent federal directives and research indirect cost reimbursements are expected to result in funding reductions, intensifying financial pressures and prompting AMCs to explore creative strategies for financial diversification. Universities affiliated with AMCs are also experiencing growing fiscal strain, including challenges to endowment returns and increased scrutiny of their nonprofit tax status.
Navigating this evolving financial landscape requires AMCs to make difficult decisions about balancing their mission-driven goals with financial sustainability. The need for resource optimization is more pressing than ever, resulting in a reexamination of traditional business models. These pressures are reshaping AMC operations and redefining how higher education institutions manage and steward their resources.
Actions to take:
- Diversify revenue streams: Build partnerships with industry, tech firms, and startups; expand into digital health; and pursue commercialization of research discoveries.
- Enable real-time spend visibility and control: Workday’s unified financial platform empowers AMCs to critically evaluate spend transactions and analyze metrics.
- Support scenario-based planning for volatile funding: With integrated planning solutions, AMCs can simulate forecasts in federal funding, indirect cost reimbursement caps, and endowment pressures to prepare for multiple financial outcomes with agility.
3. Talent and retention
AMCs are grappling with significant challenges in talent and retention, primarily driven by an increase in administrative burden and risk of talent moving to more location-flexible competitors. The need for alignment in culture and leadership should remain a top priority, and to address these issues, AMCs are rethinking their professional development strategies, investing in their future leaders, and bridging the gap between leadership and supporting staff.
By directly addressing issues like increased competition for specialized clinical and administrative talent, workforce burnout, and generational shifts in career expectations, there is more focus on culture, alignment, and accountability. Leadership training, succession planning, and care delivery redesign, including the utilization of non-licensed staff, are also emerging trends.
Actions to take:
- Build leadership capacity through scalable training programs: Design and implement leadership development initiatives that start small and scale over time.
- Redesign care delivery and workforce models: Rethink care delivery by integrating non-licensed staff and optimizing team-based models, to enable the organization to maintain high-quality care while managing costs and addressing workforce shortages.
- Implement succession planning and talent strategy redesign: Develop structured succession plans and modernize HR service delivery while including skills gap analyses, rotational leadership assignments, and tailored professional development plans.
4. Conflicting priorities
AMCs must balance the immediate, real-time demands of 24/7 patient care with the more structured, term-specific nature of academic education and research, which adheres to a different pace and set of priorities. AMCs must navigate complex funding structures, where resources are allocated across clinical, research, and educational missions, often leading to tensions over budget and resource distribution.
Implementation of a shared governance approach, anchored on achieving buy-in across education, healthcare, and research stakeholders, will make for unified and effective decision making that is in the best long-term interest of the institution.
Actions to take:
- Establish cross-mission change networks: Create cross-functional committees ensuring each understands the organization's vision and prioritization, to help the organization overcome volatile change.
- Develop mission-integrated, in-system training: Utilize in-system learning platforms to equip leaders with the skills to navigate cultural and operational differences.
- Use transparent metrics to balance priorities: Develop balanced scorecards using people analytics that measure impact across all three missions.
5. Unanticipated challenges
Acknowledging and planning for known disruptors, such as fluctuating funding sources and evolving regulatory requirements, and using established strategies and risk mitigation techniques, has helped AMCs navigate market fluctuations and economic shifts with a degree of predictability. However, the current landscape has shifted dramatically, plunging AMCs into unknown territory.
Leaders who can adjust strategy and use unified, enterprisewide systems for data-driven decisions are better equipped to pivot quickly on external pressures. AMCs should answer the following to shape their future: "If all the pressures of today went away, what would you do differently from a strategic perspective within your organization over the next three to five years? What aspects might you change or what areas invest in more so than you do now?"
Actions to take:
- Enterprise risk management: Establish a risk committee that continuously identifies, monitors, and mitigates emerging threats.
- Agility mindset: Embed "rapid response" teams that can pivot resources when external shocks occur.
- Strategic reserves: Build flexible capital reserves or contingency funds to weather unexpected downturns while using future-back strategies (e.g., "What would success look like in 5 years?") to guide investments today.
Overcoming these challenges
A consistent theme across all the challenges mentioned above is the ability to pivot quickly using modern digital solutions and readily available enterprisewide data. AMCs that invest now in strategic initiatives that allow for better, faster decision making and are AI enabled will be well-equipped to weather the storms of today and the future.
Leveraging a modern, digital solution - like Workday - across your AMC enterprise presents an opportunity for a single, cohesive platform to produce enterprisewide reporting and scenario planning across the university, medical center, and health system. A consolidated system enables AMCs to make decisions based on data, improving their agility and resilience independent of organizational structure. Enhanced data management also facilitates talent management through more efficient recruitment, onboarding, and professional development processes. Huron's experience with and focus on AMCs enables the ability to maximize Workday's functionality to help the AMC community operate more efficiently and maintain focus on research, education, and care delivery in line with the organization's mission.