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Basic Concepts of the U.S. Health Care Delivery System: Student Activity Workbook
Chapter 5
Inpatient and Outpatient Services
Nancy J. Niles
Introduction
Inpatient services are services that involve an overnight stay of a patient.
The U.S. health care industry was based on the provision of inpatient services provided by hospitals and outpatient services provided by physicians.
Over the past two centuries, hospitals have evolved from serving the poor and homeless to providing the latest medical technology to serve the seriously ill and injured.
Although their primary revenue is derived from inpatient services, as a result of cost containment and consumer preferences, more outpatient services are being offered by hospitals.
Introduction
Many hospitals have evolved into medical centers which provide the most advanced service. Hospitals can be classified by who owns them, length of stay, and the type of services they provide.
Inpatient services typically focus on acute care which includes secondary and tertiary care levels that most likely require inpatient care. Inpatient care is very expensive.
Hospitals began offering more outpatient services which do not require an overnight stay and were less expensive.
Outpatient services have become more popular because they are less expensive and they are preferred by consumers.
History of Hospitals
The word hospital comes from the Latin word “hospes” which means a visitor or host who receives a visitor. From this root word, the Latin “hospitalia” evolved which means an apartment for strangers or guests. The word “hospital” was a word in the Old French language.
As it evolved, England began a shift in the 15th century to mean a home for the infirmed, poor or elderly.
History of Hospitals
Over five thousand years ago, Greek Temples were the first type of hospital with similar institutions in Egyptian, Hindu and Roman cultures.
They were the precursor of the almshouses or poorhouses that were developed in the 1820s to serve the poor primarily.
Pesthouses, operated by local governments, were used to quarantine people who had contagious diseases such as cholera, etc. The framework of these institutions set up the concept of the hospital.
History of Hospitals
1789: the Public Hospital of Baltimore was established for the indigent. In 1889, it became Johns Hopkins Hospital, which exists today as one of the best hospitals in the world.
1850s: a hospital system was finally developed but their conditions were deplorable because there were unskilled providers. Hospitals were owned primarily by physicians.
History of Hospitals
In the early 20th century, with the establishment of more standardized medical education, hospitals became more accepted across socioeconomic classes and became the symbol of medicine.
With the establishment of the American Medical Association who protected the interests of providers, the reputation of providers became more prestigious.
In the 1920’s, the development of medical technological advances, increased quality of medical training and specialization.
History of Hospitals
During the 1930s-1940s, the ownership of the hospitals changed from physician owned to church-related and government operated.
Religious orders viewed hospitals as an opportunity to perform their spiritual good works. Several religious orders established hospitals that still exist today.
History of Hospitals: Milestones
In 1973, the first Patient Bill of Rights was introduced to represent health care consumer representation in hospital care.
In 1972, the American Hospital Association had all hospitals display a “Patient Bill of Rights” in their institutions.
In 1974, the National Health Planning and Resources Development Act: required states to have Certificate of Need (CON) laws to ensure the state approved any capital expenditures associated with hospital/medical facilities’ construction and expansion.
The Act was repealed in 1987 but 36 states still have some type of CON mechanism . The concept of CON was important because it encouraged state planning to ensure their medical system was based on need.
History of Hospitals
Hospitals are the foundation of our health care system. The first type of insurance was hospital insurance.
Although hospitals are still an integral part of our health care delivery system, the method of their delivery has changed. “Hospitalists”, created in 1996, are providers that focus specifically on the care of a patient when they are hospitalized
More hospitals have recognized the trend of outpatient services and have integrated those types of services in their delivery.
History of Hospitals
In 2000, as a result of the Balanced Budget Act cuts of 1997, the federal government authorized an outpatient Medicare reimbursement system which has supported hospital outpatient services efforts.
In 2007, hospitals employed over five million individuals, were the second largest source of private sector jobs, provided outpatient care to over 600 million patients and performed 27 million surgeries.
Hospital Types
There are three major types of hospitals by ownership: 1) public, 2) voluntary and 3) proprietary hospitals.
Public hospitals are the oldest type of hospital and are owned by the federal, state or local government.
Federal hospitals generally do not serve the general public but operate for federal beneficiaries such as military personnel, veterans and Native Americans. The Veterans Affairs hospitals are the largest group of federal hospitals.
County and city hospitals are open to the general public and are supported by taxes. Many of these hospitals are located in urban areas to serve the poor and the elderly.
Hospitals Types by Ownership
Voluntary hospitals are non government owned, private and not for profit and target community care. They are considered “voluntary” because their financial support is the result of community organizational efforts.
Private not for profit hospitals are the largest group of hospitals. In 2007, there were nearly 3,000 not for profit hospitals.
Proprietary hospitals or investor-owned hospitals are for profit institutions and are owned by corporations, individuals or partnerships. They have the lowest utilization rates. In 2007, there were 873 proprietary hospitals.
Hospitals by Specialty
Hospitals may be classified by what type of services they provide and their target population.
A general hospital provides many different types of services to meet the general needs of their population. Most hospitals are general hospitals.
Specialty hospitals are hospitals that provide services for a specific disease or target population such as psychiatric, children’s, women’s, cardiac, cancer, rehabilitation, and orthopedic hospitals.
Other Hospital Classifications
Hospitals can be classified by single or multi unit operations.
Two or more hospitals may be owned by a central corporation. Multi unit hospitals have resulted in the merging or acquiring of other hospitals that have financial problems.
These chains can be operated as for profit, not for profit, or government.
Other Hospital Classifications
In 2007, there were over 2,700 hospital systems.
A short stay or acute care hospital focuses on patients who stay on an average of less than 30 days.
Community hospitals are short term facilities.
Other Hospital Classifications
A long term care hospital focuses on patients who stay on an average greater than 30 days.
Rehabilitation and chronic disease hospitals are examples of long term. More than 90% of hospitals are acute or short-term.
Hospitals can be classified by geographic location—rural or urban.
Urban hospitals tend to pay higher salaries and consequently offer more complex care because of the highly trained providers and staff. In 2007, there were nearly 3,000 urban hospitals.
Other Hospital Classifications
Rural hospitals tend to see more poor and elderly and consequently have financial issues.
In 2007, there were nearly 2,000 rural hospitals (www.aha.org). As a result of this issue, the Medicare Rural Hospital Flexibility Program (MRHP) was created as part of the Balanced Budget Act of 1997.
The MRHP allows some rural hospitals to be classified as critical access hospitals.
This classification enables them to receive additional Medicare reimbursement called cost plus. Cost plus reimbursement allows for capital costs which enables facilities to expand.
Other Hospital Classifications
Teaching hospitals are hospitals that have one or more graduate resident programs approved by the American Medical Association.
Academic medical centers are hospitals organized around a medical school.
There are approximately 400 teaching hospitals including 64 Veteran’s Affairs Medical Centers that are members of the Council of Teaching Hospitals and Health Systems in the U.S. and Canada.
These institutions offer substantial programs and are considered elite teaching and research institutions affiliated with large medical schools
Other Hospital Classifications
Church related hospitals are developed as a way to perform spiritual work. The first church affiliated hospitals were established by Catholic nuns. These hospitals are community general hospitals. They could be affiliated with a medical school.
Osteopathic hospitals focus on a holistic approach to care. The emphasize diet and environmental factors that influence health. Their focus is preventive care. There are approximately 200 osteopathic hospitals in the U.S.
Hospital Governance
Hospitals are governed by a Chief Executive Officer (CEO), a board of trustees or board of directors, and the chief of medical staff.
The Chief Executive Officer or President is ultimately responsible for the day to day operations of the hospital and is a Board of Trustee member.
Hospital Governance
The Board of Trustees is legally responsible for hospital operations.
The chief of medical staff or medical director is in charge of the medical staff/physicians that provide clinical services to the hospital.
The medical staff is divided according to specialty such as obstetrics, cardiology, radiology, etc.
Licensure, Certification and Accreditation
State governments oversee the licensure of health care facilities including hospitals. States set their own standards.
State licensure focus on building codes, sanitation, equipment and personnel. Hospitals must be licensed to operate a certain number of beds.
Certification of hospitals enables them to obtain Medicare and Medicaid reimbursement.
Licensure, Certification and Accreditation
This type of certification is mandated by the Department of Health and Human Services.
All hospitals that receive Medicare and Medicaid reimbursement must adhere to conditions of participation which emphasize patient health and safety.
Accreditation is a private standard developed by accepted organizations as a way to meet certain standards.
International Organization for Standardization (ISO)
Established in 1947 in Geneva, Switzerland, the International Organization for Standardization (ISO) is a worldwide organization that promotes standards from different countries.
Although this is not an accrediting organization, those organizations that register with the ISO, are promoted as having higher standards. ISO 9000, quality management focus, and ISO 14000, environmental management focus are management standards that are applicable to health care organizations.
More health care organizations are registering with the ISO.
Patient Rights
The Patient Self-Determination Act of 1990 requires hospitals and other facilities that participate in the Medicare and Medicaid programs to provide patients, on admission, with information on their rights which is referred to as the Patient Bill of Rights.
If you enter any hospital, you will see the Bill of Rights posted on their walls. This law requires that the hospital maintains confidentiality of their personal and medical information.
The patient also has the right to be provided accurate and easy to understand information about their medical condition so they may make an informed consent about any of their medical care.
Current Status of Hospitals
Many hospitals have become the “dinosaurs” of the health care industry.
Nearly two thirds of hospitals have financial problems.
In the 1990s, many hospitals merged with other hospitals, were acquired by other hospitals or became part of a hospital chain.
Current Status of Hospitals
Unfortunately, as a result of the economic recession, there are fewer insured citizens and therefore less inpatient care and fewer patients who can pay for their care.
A 2008 American Hospital Association survey of 736 hospitals from 30 states indicated that 40% of the respondents reported a drop in overall admissions.
Uncompensated care in 2008 was up 8% from July to September compared to 2007 data, and there was a moderate to significant decline in elective procedures.
Outpatient Services
As discussed earlier, outpatient services are services that are provided that do not require an overnight stay. Often, the term ambulatory care is used interchangeably with outpatient services.
Ambulatory means literally a person is able to walk to receive a service which may not always be necessarily true. The term “outpatient’ is a more general term for services other than inpatient services.
Hospitals also offer outpatients services in their emergency departments and their outpatient clinics.
Physician Offices
The basic form of an outpatient service is a patient seeing their physician in their office.
Traditionally, physicians established solo practices but the cost of running a practice became too expensive so more physicians are establishing group practices. Approximately two thirds now operate as a group practice.
Approximately 70% of group practices are single specialty groups with the remaining 30% formed as multispecialty group practices
Hospital Emergency and Outpatient Services
Hospitals traditionally provide inpatient services although nearly all community hospitals provide emergency services which are considered outpatient services.
Although emergency departments have the technology to treat emergency situations, many emergency rooms are used for non emergency issues.
Individuals who are 75 years or older use an emergency room 66% more frequently than the general population.
Hospital Outpatient Clinics
Many outpatient clinics are found in teaching hospitals. They use outpatient clinics as an opportunity to teach and perform research.
The clinics are categorized as surgical, medical and other. Larger teaching hospitals may have 100 specialty and subspecialty clinics. They may operate as part of the hospital or as a hospital owned entity.
Also, any type of rehabilitation service, elective surgery such as cosmetic procedures, kidney dialysis, substance abuse treatment, sports medicine and other specialty services are offered as an ambulatory service.
Urgent/Emergent Care Centers
Urgent/emergent care centers were first established in the 1970s. Urgent/emergent care centers are used for consumers who need medical care but their situation is not life threatening. This would take the place of the hospital emergency room visit.
The medical issue usually occurs outside traditional physician office hours so they see patients in the evenings, weekends and holidays.
Many of these centers are both walk-in and appointment facilities. They may be in strip malls or medical buildings so they are accessible for consumers.
Urgent/Emergent Care Centers
Many managed care organizations will reimburse member visits because they are less expensive than an emergency room visit
The Urgent Care Association of America estimates there are 8,000 urgent care centers in 2008.
According to the Urgent Care Association of America recent survey, approximately 54% of urgent centers are owned by physicians; 25% are hospital owned, and 18% are corporately owned.
Approximately 85% of the centers have a physician on site at all times, and 75% of the physicians are board certified in a primary specialty.
Ambulatory Surgery Centers (ASCs)
Ambulatory surgery centers are surgeries that do not require an overnight stay.
Approximately eight million surgeries are performed in 4,000 ASCs annually. Ambulatory care centers contribute to health care cost containment.
Procedures at ASCs cost nearly 50% less than inpatient surgeries
Community Health Centers
CHCs often are located in urban and rural areas where there is a designated need. They enter a contract with the state or local health department to provide services to these populations.
Community Health Centers receive funding under section 330 of the Public Health Service Act with grants from the Department of Health and Human Services of approximately $1 billion.
Community Health Centers
It is estimated one of every 19 individuals in the U.S rely on CHCs for primary care. Nearly 16 million were treated at CHCs in 2008.
On March 2, 2009, President Barack Obama released $155 million in grant money to support 126 additional Community Health Centers nationwide
It is anticipated that within a two year period, an additional $2 billion will be invested in Community Health Centers to support investments in health care.
Home Health Agencies
Home health agencies and visiting nurse agencies provide medical services in the patient’s home.
The earliest form of home health care was developed by Lillian Wald who created the Visiting Nurse Service of New York established in 1893 to service the poor.
In 1909, she persuaded the Metropolitan Life Insurance Company to include nursing home care in their policies.
Home Health Services
This care often is provided to the elderly, disabled or a patient that is too weak to come to the hospital or physician’s office.
Services include skilled nursing care and home health aide care such as dispensing medications, assisting with ADLs and meal planning.
Home Health Services
Physical, speech and occupational therapy can also be provided at home. Medical equipment such as oxygen tanks, hospital beds, etc may also be provided.
Annually, approximately seven million people receive home health services which are provided by approximately 20,000 agencies.
Home Health Care Agencies
Although most states offer licensing for home health agencies, it is important that home health agencies are Medicare certified because they are required to comply with the Center for Medicare and Medicaid Service regulations.
They can also receive accreditation from the Community Health Accreditation program (CHAP).
Approximately 40% of home health care agencies are certified by Medicare. Nearly 70% of individuals who received home health care are over 65 years of age.
Occupational Health Programs
Occupational health programs are often located at employer sites. Their purpose is to maintain the safety of the employee.
Larger companies may provide physical exams, drug screenings and basic health care.
Employee assistance programs (EAPs) are a type of occupational health program.
Other Health Services – Respite Care
This continuous care often becomes stressful for those caregivers. These caregivers may still be working full-time and have other family members that need their attention.
As a result of this issue, respite care or temporary care programs were formally established in the 1970s to provide relief to those caregivers.
These programs provide systematic relief to those caregivers who need a mental break.
Hospice
Hospice care provides care for those who have a life threatening illness and the patient’s family.
Medicare, private health insurance, and Medicaid (in 43 states) cover hospice care for qualified patients. A typical hospice care team includes the following:
Doctor, Nurses
Home health aides
Clergy or other spiritual counselors , social workers
Volunteers
Occupational, physical, and/or speech therapists.
Adult Day Care
Adult day care centers are day programs that provide a medical-social model which provides social interaction and intensive medical related activities.
These centers were developed in the 1960s based on research that indicated adult day care centers were an opportunity provide a break for their informal caregivers.
The average age of the adult day care center recipient is 72 years old and two thirds are female.
Senior Centers
Established by the Older American Act of 1965, senior centers provide a broad array of services for the older population.
According to 2004 statistics, there are 5,000 senior centers in the U.S. Approximately 70% of users are women. Users spend three hours per day, one to three times per week.
The average age is 75 years of age.
Funding is received from state and local governments, grants and private donations.
They serve as community focal points for seniors. Services provided include meal and nutrition programs, education, recreational programs, volunteer opportunities, counseling, and other services.
Women’s Health Centers
Women seek health care services more frequently than men. They have unique health needs that can be provided by a medical facility that focuses on their needs.
Recognizing this need, in 1991 the U.S. department of Health and Human Services established an Office on Women’s Health (OWH).
Their mission is to promote women’s and girl’s health by gender specific health activities.
Meals on Wheels Association of America (MOWAA)
The first Meals on Wheels program was started in Philadelphia, PA in 1954 and is the largest and oldest organization in the U.S. that provides meal services those seniors in need.
Most of the volunteers were high school students. They were dubbed “Platter Angels”.
Eventually cities nationally established similar programs, which are continued today and represent an important component of senior citizen home health services.
Planned Parenthood Federation of America
The Planned Parenthood Federation of America is a 90 year old organization provides family services to their local communities regarding sexual health and family health.
They accept Medicaid but also provide services based on a sliding fee scale. Their outreach provides over one million individuals with important health education.
American Red Cross
Founded in 1881 and headquartered in Washington, DC, the American Red Cross provides emergency response to victims of war and natural and man-made disasters.
Approximately 91 cents of every dollar spent is invested in humanitarian programs.
There are over 700 local chapters with 35,000 employees supported by 500,000 volunteers
Doctors Without Borders
Established in 1971 by physicians and journalists, Doctors Without Borders is an international medical organization provides quality medical care to those individuals who are threatened by violence, catastrophe, lack of health care, natural disasters, epidemics or wars.
The organization won the Nobel Peace Prize in 1999. A U.S. component of this organization was established in 1990. It recently raised $152.1 million in funding.
Remote Area Medical (RAM)
Remote Area Medical was founded in 1985 to develop a mobile efficient work force to provide free health care to areas of need worldwide.
Volunteer physicians, nurses and other health care professionals provide general medical, surgical, eye, dental and veterinary care to thousands of individuals worldwide.
They determine where they are needed the most and set up a mobile health care unit for weekend services only. As a result of the economic downturn in the U.S., there continues to be a huge need for their services.
Telehealth
Telehealth uses technology for providing health care services is an efficient method of providing outpatient care. Telemedicine is a new model for delivering health care —it moves information electronically to consumers quickly and efficiently without a patient physically seeing a health care provider.
Using technology is an efficient and cost effective way to target underserved populations.
SwiftMD- An example of Telehealth
SwiftMD, a telemedicine organization, was recently founded by a group of board-certified emergency physicians, who have developed a membership based model for providing health care.
An emergency trained physician returns the call or contact within 30 minutes to determine if it is an emergency or not. The service is available 24/7.
They do not treat pregnancy-related problems or mental health disorders. They treat conditions that a patient would normally go to their physician for in their office.
Summary of Chapter 5
Although hospitals admit 35 million individuals annually, the health care industry has recognized that outpatient services are a cost effective method of providing quality health care and has evolved into providing quality outpatient care.
This type of service is the preferred method of receiving health care by the consumer.
In 2006, there were over 900 million visits to their doctor’s offices which is the traditional method of ambulatory care.
Summary of Chapter 5
As discussed earlier, there are more outpatient surgical centers, imaging centers, urgent/emergent care centers, and other services that used to be offered on an inpatient basis.
There will continue to be an increase in outpatient services being offered.
As a consumer, technology will only increase the quality and efficiency of your health care.
The implementation of the patient’s electronic health record nationwide will be the impetus for the development of more electronic health care services being offered.
