USC Stakes Its Future on Medicine

DODGER STADIUM’S lights peek over the hills of Elysian Park as the land tumbles westward into Silver Lake and Hollywood. The Hollywood Hills and Santa Monica Mountains rise in the distance. Los Angeles shines before us.

Urologic surgeon Inderbir Gill, his arms crossed over slate blue surgical scrubs, scans the horizon from his seventh-floor office at USC Norris Comprehensive Cancer Center at Keck Medicine of USC and smiles. This vibrant city is USC’s hometown.

Gill has reason to feel a special connection to it: He and his fellow Keck Medicine of USC physicians are caring for growing numbers of its residents.

In the past four years, as the number of inpatients discharged from hospitals across California dropped, discharges at Keck Medical Center of USC climbed by 31 percent. At the same time, Keck Medicine’s revenues more than doubled, making it a $1.2 billion operation. USC’s medical enterprise is expanding faster than anyone could have imagined—and increasing in reputation at the same time.

Keck Medicine of USC is now a $1.2 billion operation.

“We have the skill, the talent for patients seeking health care not just from across the city, but from across the country and across the globe,” says Gill, chairman of the Catherine and Joseph Aresty Department of Urology and executive director of the USC Institute of Urology. As if to prove his point, the day after we spoke, Gill flew to India to participate in the inauguration ceremonies of that country’s newest flagship multispecialty hospital in Mumbai—one created in consultation with Keck Medicine and two other top American medical institutions.

Mounting numbers of satisfied patients. Swelling ranks of top physicians. New satellite medical offices and partnerships with local hospitals. Highly recruited scientists joining the faculty. Buildings rising on the Health Sciences Campus. They’re the drumbeat for a movement: USC is going all-in on academic medicine.

“USC stands at the center of where the action is: at the nexus of a new century of the Pacific, in a place that is the greatest living laboratory for the health challenges of the 21st century,” says USC President C. L. Max Nikias. “We want to be one of the most influential academic medical centers of the Pacific Rim.”

No middle ground for excellence

With dramatic changes in the health care landscape underway, the nation’s academic medical centers are seeing their profit margins perilously whittled down. At the same time, bioscientists are scrambling to win endangered federal research dollars. So why would USC embrace financial risk by growing its medical enterprise?

“This brings bigger liability, and much bigger uncertainty. But it comes with the territory,” Nikias says. “If you still want to be one of the top research universities, you have no choice but to make serious investments in the medical and biological sciences and biotech.

“Middle ground is failure, guaranteed. There is no middle ground.”

If you still want to be one of the top research universities, you have no choice but to make serious investments in the medical and biological sciences and biotech.

C. L. Max Nikias

Nikias sees medicine as the next step in USC’s evolution.

In the last 50 years, a revolution in physics and electronics drove global innovation. Scientists and engineers pushed advances in industry and aerospace. Next came personal computing and the Internet.

Now the great age of medicine and bioscience is dawning, Nikias says. That means big changes for USC, from patient care to biomedical research.

Within the past few years, USC took ownership of its flagship private hospitals—the 401-bed Keck Hospital of USC and the 60-bed USC Norris Cancer Hospital—for $280 million from Tenet Healthcare.

“USC understood that to become one of the top universities in the country, it needed a very good medical school and medical center, and we weren’t going to get there unless we owned the hospitals,” says renowned cardiothoracic surgeon Vaughn Starnes, chair of the Keck School of Medicine of USC’s Department of Cardiothoracic Surgery and director of the USC CardioVascular Thoracic Institute.

We irreversibly committed the entire, worldwide Trojan Family, in perpetuity, to taking a leadership role in the human health revolution.

C. L. Max Nikias

USC also pulled 520 of its doctors from 19 different practices into a unified university medical group practice. “Suddenly, more than 40 percent of USC’s overall budget was related to medicine and health, up from 14 percent,” Nikias says. “We irreversibly committed the entire, worldwide Trojan Family, in perpetuity, to taking a leadership role in the human health revolution.”

The future of medical integration

And more changes are coming as part of a plan to bring a fully integrated system to patients, explains Thomas E. Jackiewicz, senior vice president and CEO for Keck Medicine.

Right now, USC’s two main hospitals treat patients with the most challenging health problems—so much so that Keck Medical Center has the highest acuity rate (a measure of the seriousness of patients’ illnesses) of any hospital west of the Mississippi. Patients fly from other continents to see top surgeons like Starnes and Gill. “We have a tremendously good surgical hospital,” Jackiewicz says. “Now it is time to build out the other parts of the network.”

A true health network also offers neighborhood doctors who provide everyday care, from women’s exams to heart checkups. It has community-based ambulatory surgery centers and hospitals where patients can get routine surgeries close to home. “This is where faculty deliver basic health care, appendectomies, gallbladder removals and the like,” Starnes says. And all Keck Medicine caregivers, from a family physician to an oncologist dealing with rare cancers, coordinate their care.

Goal: Open at least 10 satellite medical locations in Southern California.

As part of this integration, USC bought its first community hospital,USC Verdugo Hills Hospital, in 2013. Keck Medicine also has joined with existing medical centers across Southern California to provide specialty care, such as an oncology affiliation with Hoag Memorial Hospital Presbyterian in Orange County, and a joint venture with Surgical Care Affiliates for surgery centers. It set up its own offices and institutes in places like Bakersfield, Beverly Hills, Pasadena and Irvine, as well.

Goal: Double the physician network to more than 1,200 doctors.

Doctors in the Keck Medicine system share electronic medical records so that if a patient was treated in a satellite office for diabetes, for example, his surgeon will know every detail of his history before operating on him, to ensure a smooth recovery.

Despite other mature health systems already operating in the Los Angeles area, USC leaders aren’t deterred. They see Keck Medicine as a sort of medical startup—and its infancy is an asset in a rapidly changing environment. “We are shaping and defining the academic medical center of the future under today’s health care reality,” Nikias says. “We don’t have the constraints of other universities. We’re creating a new culture.

“We’re entrepreneurial. We can make decisions quickly, and as a result we’re very nimble.”

As to whether there’s room for Keck Medicine physicians to help more patients in the competitive LA region, Gill’s recent experience in urology gives some insight. Keck Medicine’s urologic surgeons performed six times as many robotic surgeries in 2013 as they did in 2009 when Gill arrived from the Cleveland Clinic—a growth of some 660 cases. The team is a world leader in advanced, innovative robotic surgeries, and according to state data, USC is now the largest provider of urologic care in Southern California, with a 60 percent hike in all urologic surgeries over the past four years.

“The demand for quality specialty care is only going to continue to grow,” Jackiewicz says.

The next generation of healers

Keck Medicine is growing up, but thanks to the Keck School of Medicine (established in 1885), USC already has a storied medical history. USC also has long contributed to bioscience research and drug discovery. Now the growth in clinical services may enable more medical students and residents to become great physicians and more scientists to find answers to disease.

Across the nation, revenue from patient care in academic medical centers like USC’s is critical to universities because they underwrite some of the costs of educating medical students and conducting research. Increased patient dollars drive more scientific discovery and produce the next generation of healers.

New recruits have brought in $140 million in National Institutes of Health funding.

That dovetails into USC’s aspirations as a bioscience hub. The university has recruited bioscientists who are tackling mysteries from how the brain grows to how cancer moves and spreads. And star scientists attract star physicians who want to collaborate with them. As USC hired six new directors of research centers and institutes, Keck School of Medicine Dean Carmen Puliafito recruited more than 70 professors in the Keck School over the past five years.

They bring with them more than $140 million in National Institutes of Health (NIH) funding and include groups from Harvard University, University of Rochester, UCLA and the Scripps Research Institute.

Many USC bioscientists will join engineers at the USC Michelson Center for Convergent Bioscience, set to open in 2017, and another new research building is planned for the Health Sciences Campus. Nikias envisions that USC’s life sciences and engineering brainpower will help propel Los Angeles’ emergence as a center for biotech. The USC Eye Institute and the Keck School’s Department of Otolaryngology – Head & Neck Surgery are among the top 10 in NIH funding in their areas.

The changing face of health care

This increased emphasis on life sciences research translates to benefits for patients, Jackiewicz says. “When people are sick, they want the newest and most innovative, and that’s what we’re about.”

At the same time, the provision of medicine is changing, thanks to health care reforms wrought by the Affordable Care Act, as well as the evolution in medical technology. Ultimately these changes will shape USC’s infrastructure.

People are going to be getting a lot more information than they have today when shopping for their health care.

Thomas Jackiewicz

Besides mandating that Americans get health insurance, the Affordable Care Act requires health care providers to report on their costs and the quality of their patient care and outcomes. Political changes could roll back some elements of health care reform, but experts believe many elements will stay, and that means greater transparency. “People are going to be getting a lot more information than they have today when shopping for their health care. I believe that’s going to be really good for us,” Jackiewicz says.

Comparison shopping and the pursuit of efficiencies mean that even more consumers with simple health problems will likely turn to small general hospitals and outpatient surgery centers where care costs less. For more serious problems, they’ll continue to head to highly specialized, large academic hospitals, which are more expensive because care is more intensive. And as more patients have insurance, many expect that fewer patients will turn to emergency rooms for primary care, leaving these treatment centers for true life-and-death cases (although a projected national shortage of primary care physicians may complicate matters).

Medicine goes high tech

Add to that the challenge facing USC physicians: Some facilities built one or two decades ago are already technologically obsolete for today’s operations. Take Starnes’ surgeries, for example. Fixing a faulty aortic valve in the heart used to mean opening the patient’s chest. Today, Starnes and his fellow cardiac surgeons can do it by inserting their instruments through a tiny incision in the groin and guiding them up an artery toward the heart. That innovation means quicker recovery for patients, but requires surgeons to use more imaging equipment—which takes up space—during procedures.

“Medicine has changed dramatically in the last 20 years, particularly the surgical sciences,” Starnes says. To help more patients benefit from these advanced procedures, Keck Medical Center created a hybrid operating room to squeeze in high-tech imaging machines, but it needs more of these rooms. And since the hospital is at capacity—and more patients are expected as the nation ages—it needs more beds too.

That means USC must build and grow its intensive hospital facilities for the sickest patients. “Otherwise, we’re going to be limited by the things that we can do, the technology that we can introduce to stay current and stay on the leading edge,” Starnes says.

USC also is building a new facility for less intensive (and less expensive) outpatient cancer treatments across medical disciplines, set to open in 2016. Buying and affiliating with existing small hospitals and clinics in the community is in the works as well.

None of this is cheap. Much of the funding will come from gifts to the Campaign for USC, the university’s $6 billion fundraising effort. Keck Medicine aims to raise a quarter of that target—$1.5 billion. It’s a lot, but there’s also confidence in the air, as USC hit the $4 billion mark in four and a half years.

“President Max Nikias says something that totally resonates with me: ‘USC’s dreams and aspirations far exceed our ability to pay for them,’” says Gill with a wry laugh. “He exhorts us to take calculated risks. I take him at his word. Heck yes! USC medicine is truly coming of age.”