The JIM interview. David Korn, MD.

Abstract

When David Korn, MD, was named dean of the Stanford University School of Medicine on October 9, 1984, he assumed leadership of a world class research institution. Stanford was at the forefront of medicine in the areas of transplantation and oncology, and the steady influx of privately insured patients had generated a net operating surplus of $17 million in that year alone. However, in the same issue of the Stanford University Hospital newsletter which announced the selection of Korn as Dean, a small article appeared on a new prospective payment system based on diagnosis-related groups (DRGs). The article stated that the new system had begun smoothly, though some payments for cost outliers had been delayed. Other cost containment measures soon followed, most notably the implementation of managed care, and by 1990, Stanford was $14 million in the red. Buffeted by changes in medical reimbursement, competition with less costly hospitals, and a nasty squabble with Congress over indirect research costs, Stanford has been on the frontlines of a struggle now confronting many academic medical centers. After successfully consolidating the university's clinical services into a unified Stanford Health System, Korn announced that he would be stepping down as Dean on April 1. Interviewed in his office in Palo Alto, Korn reflected on the difficulties of dealing with managed care, the current financial state of the institution, and what Stanford's experience may predict for other academic medical centers.