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Chapter4-HospitalsOriginOrganization_Performance4.pptx
Chapter 4
Hospitals: Origin, Organization and Performance
CHAPTER OBJECTIVES
Understand origins of America’s hospitals
Understand reimbursement and other factors that shaped the current hospital system till today
Identify the many dimensions of hospital functions and financing
Review the quality and financial challenges in today’s hospital environment
Identify effects of the ACA on future hospital role and operations
Character of American Hospitals
Appreciated
Maligned
Poorly understood
Places of:
Treatment
Research
Education
Employment, community economy
Early History (1)
1700’s seaport cities: decrepit pesthouses segregated contagious, diseased sailors
Pesthouses commissioned by town boards housed mentally & physically ill who offended polite society
Although provided in the most deplorable of conditions by today’s standards, early “hospital” care reflected American concepts of “charity” and public responsibility providing for society’s most destitute and vulnerable members
Early History (2)
1736: Bellevue housed the “poor, aged, insane and disreputable,” originally “The Poor House of New York City”
1789: Public Hospital of Baltimore, later Johns Hopkins University Hospital
1835: Eloise Hospital, Michigan serving “old, young, deaf, dumb, blind, insane and destitute”
Early History (3)
Following upon municipal “pesthouses,” Physicians founded hospitals with citizen funding in the 1800s:
Protect the well from sick and “insane”
Provide centrally located “practice” teaching sites
Religious Orders (mid 1800s)
Protestant and Catholic Sisters played major roles in “professionalizing” nursing care: Sisters of Charity and German “Deaconesses”
Sources that Shaped the Hospital Industry: Health Insurance, Specialization, Hospital Expansion (1)
Private health insurance: Blue Cross, other plans changed “charitable” mission with business motives
In 1940, only 9% of U.S. population had hospital insurance
By 1960, billions $$ flowing into hospitals from insurance companies
Medical specialization, advances encouraged hospital use
Hill-Burton Act (1946): federal support for new construction & expansion
Sources that Shaped the Hospital Industry: Health Insurance, Specialization, Hospital Expansion (2)
Medicare & Medicaid fueled costs & utilization
Medicare payment rates became the national standard for hospital reimbursement
Changed prior “social role” of hospitals in caring for the most needy, the elderly and poor; hospitals transformed to lucrative business enterprises
Struggles to define the relative roles of voluntarism, government and business continue
Growth and Decline in Number of Hospitals
1873: 178; 1909: 4,300; 1946: 6,000+
1946 Hill-Burton Act expansions and new construction through 1980s yielded a high point of approx. 7,200 acute-care hospitals
1980s: medical advances transferred procedures to ambulatory settings, cost containment reduced numbers to approx. 5,700 through mergers and closures
Types of Hospitals
Acute care: avg. stay ≤30 days
Long-term care: psychiatric, rehabilitation
Teaching: medical school affiliation, student & resident clinical education (400-6% of all hospitals)
Non-teaching: not medical-school affiliated but may provide educational experiences for health-related students
Hospitals by Ownership Status, 2011
All U.S. Registered Hospitals: 5724
51%- Non-governmental not-for-profit
Teaching and non-teaching
21% -VA, State and local governments
Federal, state, city, county owned
18%- Investor-owned for profit
Management companies, physicians
10%-Non-federal psychiatric or long term care
Physician-owned Hospitals
Major growth since 1965 to over 1,000 in 2011; specialize in cardiology, orthopedics, surgery.
High-efficiency with many amenities
Focus on less complex, profitable cases
Concerns regarding financial incentives, competition with community hospitals
Supporters point out owners’ service to community hospitals and tax payments as for-profit entities
Financial Condition of Hospitals
Declining occupancy: major shifts to ambulatory settings
Private insurer and Medicare pressures to cut utilization and costs
Rising operational & capital costs for technology
Competition with physicians for profitable diagnostic and treatment services
Academic Health Centers, Medical Education and Specialization (1)
Academic health center (AHC): accredited, degree-granting institution composed of a medical school, one or more professional schools (dentistry, nursing, public health, pharmacy, allied health) with an owned or affiliated relationship with one or more teaching hospitals, health system or other organized care provider.
Academic Health Centers, Medical Education and Specialization (2)
Technologically advanced; sources of major clinical research and the sophisticated technology
Technical advancements fuel specialization
Training sites for all health professionals; high costs
Serve medically needy populations
Fragmented services result from training venues
Hospital System of the Department of Veterans Affairs (1)
The largest health care system in the U.S.: 153 hospitals, 135 nursing homes, 47 residential rehab facilities, 900+ outpatient clinics
Major teaching centers- most medical school affiliated
Insulated from other hospitals’ financial woes by strong Congressional support
Hospital System of the Department of Veterans Affairs (2)
Veteran’s Integrated Service Networks (VISNs): decrease cost & improve quality; 22 VISNs function as vertically integrated delivery systems.
Health Services Research & Development Service (HSR&D): spans clinical research to management policy
Structure and Organization of Hospitals (1)
Typical organization model is the not-for-profit hospital
Direction, control & governance rest on a three-legged platform:
Board of Directors (trustees)
Administration
Medical staff
Structure and Organization of Hospitals (2)
Major Operating Divisions
Medical
Nursing
Patient support
Diagnosis
Administration & Fiscal
Human resources
Hotel services
Community relations
Structure and Organization of Hospitals (3)
Medical staff organization: headed by physician President or Chief of Staff
Liaison between administration and physicians
Recommends physician appointments; oversees quality of care
“Attendings”: physicians in practice with hospital privileges
“House staff”: post-medical school trainees under Attending/academic supervision
Structure and Organization of Hospitals (4)
Nursing Division: Largest professional component of employees
Function in “units” by type of care
Units typically led by nurse managers who coordinate staff and patient service
Structure and Organization of Hospitals (5)
Patient support: e.g. pharmacy, social work, nutrition, discharge planning
Diagnostic: e.g. labs, imaging, non-invasive cardiology
Administrative and fiscal: board of directors’ relations, strategic planning, non-clinical service management, regulatory compliance, billing, records
Structure and Organization of Hospitals (6)
Human resources: employee hiring, orientation, training, termination, benefits management, regulatory compliance, labor relations
Hotel: e.g. plant facilities, housekeeping
Community relations: Media and public relations management, community services
Information Technology’s Impact on Hospitals
Hospital adoptions of EHRs more than doubled from 16% to 35% since HITECH Act of 2009
At mid-2012, 4,000+ hospitals enrolled in Medicare & Medicaid EHR incentive programs; received $ 5B in “meaningful use” payments
Seek duplication and error reductions, access to patient records, billing and reporting efficiencies
Complexity of the System
75% employ 1000+ persons; “systems” may employ 10,000+
Hundreds of inter-related services, personnel, functions and procedures
Complicated morass for patients and families
Patient advocates help navigate issues & concerns
Types and roles of Patients
Persistent historical perceptions of patients as needy and compliant with authoritarian professionals conditioned patients to assume submissive “sick role”
More educated and assertive patients increasingly reject passive role and demand participation in care
Patient Rights, Responsibilities
Rights protected by U.S. Constitution, state laws, regulations
“Bill of Rights” (AHA) provided to every patient upon admission
Patient responsibilities: accurate information, respect providers, other patients, financial obligations
Complexity challenges rights.
Patient Bill of Rights (Synthesis) (1)
Receive respectful, considerate treatment
Know names & titles of all individuals providing their care
Complete and understandable explanations of their diagnosis, treatment and prognosis
Receive from physician all information necessary to provide informed consent
Patient Bill of Rights (Synthesis) (2)
Request & receive consultation on their diagnosis & treatment or obtain a second opinion
Set limits on the scope of treatment or refuse treatment & be informed of consequences of such refusal
Leave the hospital, unless unlawful, even against physician’s advice & receive an explanation of responsibilities in exercising that right
Patient Bill of Rights (Synthesis) (3)
Request & receive information & assistance in discharging financial obligations & review a complete bill, regardless of payment source
Access their records on demand & someone capable of explaining records
Receive assistance in planning and obtaining post discharge services
Informed Consent
Legally recognized since 1914
Patient understands medical procedure to be performed, its necessity and alternatives and why
Benefits
Risks and consequences & likelihood
Consent freely given
Second Opinions
Insurers require for certain procedures
May be patient-generated
Guard against unnecessary, inappropriate or non-beneficial procedures
Diagnosis Related Group (DRG) Hospital Reimbursement
Retrospective reimbursement perverse to cost control, fueled utilization
Response to over-use, rising costs, corporate outcries
Shift to prospective reimbursement reversed financial incentives for overuse of treatments, services
Medicare adopted 1983; other insurers followed
Discharge Planning
Arranges post-hospital care
Involves physicians, social workers, insurance company and nursing
Right of discharge appeal: Medicare designated Quality Improvement Organizations (QIOs) protect patient rights to appropriate discharge planning
Post-DRG and Managed Care: Early Market Reforms (1)
Mid 1980s-2000: ~2,000 hospitals closed; inpatient days fell by 1/3, many consolidated into local/regional/multi-facility systems.
1980s-1990s “production line” concepts to gain efficiencies; research highlighted alienated patients and caregivers
2000-present: Refocus on personalized, patient care and amenities
Post-DRG and Managed Care: Early Market Reforms (2)
Horizontal Integration: hospital mergers under one or more corporate structures to allow economies of scale, enhanced expert recruitment and deployment, increased access to capital and stronger brand marketing
Crested in mid 1990s and slowed until 2002 when anticipated reforms refueled consolidations and mergers
Post-DRG and Managed Care: Early Market Reforms (3)
Vertical Integration: Operation of a variety of related businesses; in health care, ideal vertical system encompasses full continuum:
Primary and specialty diagnosis and treatment
Inpatient medical and surgical services
Short and long-term rehabilitation
Long term home and institutional services
Terminal care
Quality of Hospital Care (1)
Operational factors, indicators, value judgments
Historically: “degree of conformance with pre-set standards”
Peer review: implicit criteria with qualitative judgments
Avedis Donabedian: structure, process, outcome
Landmark studies revealed wide variations.
Quality of Hospital Care (2)
Hospital accreditation by the JCAHO initially structural; moved to process and most recently to outcomes
Computerized information & analytical techniques allow adjustment of findings to account for patient variables previously held to confound fair assessments of patient outcomes
Quality of Hospital Care (3)
Variations in medical care: John Wennberg, Alan Gittlesohn (1973): documented variations in the amounts and types of medical care provided to patients with the same diagnoses living in different geographic areas
Amount & cost of hospital treatment related more to number, specialties and preferences of physicians than to patients’ conditions
Quality of Hospital Care (4)
Leapfrog Group: Est. in 2000; 160 fortune 500 corporations, large public and private benefit purchasers w/Robert Wood Johnson Foundation support
Hospital Quality and Safety Survey: tracks progress in implementing 30 National Quality Forum safety practices; available free, online.
Quality of Hospital Care (5)
Hazards of hospitalization: IOM Report 1999: 44-98,000 annual deaths from errors
System deficiencies, not negligent providers
Types: diagnostic, treatment, preventive, other
Congressional, professional responses rapid, but short-lived
Improvement efforts continue with some successes but no “system-wide” uniformity
Quality of Hospital Care (6)
Nursing Shortage Crisis
Dissatisfaction with staff reductions, overwork, and inability to maintain quality patient care
Qualified individuals have many less demanding career options
1/3 of nursing workforce is 50+ years of age; young persons disinclined to enter the profession
Shortage improved 2002-2009 with 62% increase in employable RNs.
Research Efforts on Quality Improvement
JCAHO: quantitatively defined quality with measurable, results focus
Patient-focused hospital satisfaction studies
Studies on test, procedure appropriateness: On average, 1/3 or more of all procedures of questionable benefit (Fig. 4-1)
Responsibility of Governing Boards for Quality of Care
Boards carry ultimate responsibility for quality; oversee quality assurance & monitor indicators such as:
Mortality rates by department
Hospital-acquired infections
Patient complaints
Adverse drug reactions
Hospital-incurred traumas
Hospitalists: A Rapidly Growing Innovation
Substitute for patients’ primary physicians
Coordinate all in-hospital care
Most are qualified in internal medicine
Many assessments underway regarding quality & coordination of care
“Specialty designation” currently under consideration
Forces of Reform (1)
Cost, quality & access are hospital survival criteria of the future
Overuse of expensive technology without evidence-based patient benefits will be curtailed
Americans are more attuned than ever to shortcomings of the expensive, ineffective health care system
Hospital performance will be matters of public judgment based on published outcomes criteria
Forces of Reform (2)
ACA effects on hospitals
Population focus: shift to accountability for overall outcomes of patient care, not only within “hospital walls,” requires new levels of coordination
Market consolidations: Mergers and Acquisitions: Create new, larger systems for negotiating power with payers, increased efficiencies and control of population groups
Forces of Reform (3)
ACA effects on hospitals, cont’d.
Accountable care organizations: Hospitals join in legal arrangements with physicians, other providers, suppliers to coordinate patient care across full spectrum of needs
Reimbursement and payment revisions: ACO shared savings; hospital value-based purchasing; readmissions reduction program; bundled payments for care improvement initiative
Continuing Change (1)
Retain core roles
technologically advanced care
education of physicians & other health professionals
clinical research sites
Advance into new role
one component of integrated systems in continuum of community-based care
Continuing Change (2)
Results of government and private entity experiments with hospital roles in a population-focused, value-driven delivery system will inform about refinements affecting costs and quality.
Rising concerns about ACOs joining prior competitors, creating market power that may drive up costs
Continuing Change (3)
Positive reports on consolidated hospital systems note that system member hospitals outperform and improve faster than independent hospitals on important quality parameters.
Likely to be variation in capability of individual hospitals to adjust to reforms; not all will survive.
