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HospitalsHospital History 101Hospital Historical TransitionToday’s HospitalHospital SupplyDistribution: SCH, RPCHCenters of ExcellenceHospital OrganizationHospital Medical StaffHospital AdministrationHospital GovernanceHospital SystemsHorizontal IntegrationVertical IntegrationHospital Revenue SourcesUncompensated CareSlide 17Regulation of HospitalsRegulation v. CompetitionMore Financing IssuesHospitals in TransitionSummaryHSCI 678 Intro to US Healthcare SystemHospitalsChapter 9Tracey Lynn Koehlmoos, PhD, MHAHospital History 101•Phase 1: 1751 to mid-1800’s–Voluntary hospitals—donations–Public hospitals—tax supported•Phase 2: Mid-1800’s to 1890–Particularist Hospitals: children, TB specific–172 hospitals in US at end of period•Phase 3: 1890 to 1920–Profit-making hospitals–4,000 hospitals & 521 mental illness centersHospital Historical TransitionBeginning: social welfare, charity poor patrons, Later: medical science, business, health service professionalsThe hospital became the hub of medical education and practiceToday’s Hospital•8510 general short-stay hospitals (2000)•Can be categorized by:–Urban/Rural–Bed Size–Level of Care–Ownership–Teaching Status–Specialty Status–Government StatusHospital Supply•Hill-Burton Program–Post WWII: funds for rural hospitals–Later, urban hospitals and up-grades•Capital Expenditure Review Program–Certificate of Need program–1122 program of SSA 1965–Limited impact on hospital distribution–Both repealed in mid-1980’sDistribution: SCH, RPCH•Sole Community Hospitals:–TEFRA 1982: ONLY source of care–Reimbursement exception Medicare/Medicaid•Rural Primary Care Hospitals:–Small hospital, rural areas–Stabilization then transfer•Essential Access Community Hospitals–Rural areas, enhanced emergency services.Centers of Excellence•High cost to maintain surgical functions•High quality, high volume = cost savings•Medicare reimburses CoE only–CABG, Joint Replacement, Outpatient cataract, heart transplantHospital OrganizationMedical StaffBoard of TrusteesHospitalAdmin.Hospital Medical Staff•Most physicians NOT hospital employees•Except radiology, pathology, ER•MD’s given Privileges to admit patients•Market exceptions:–HMO—hospitalists–Physicians who staff Public Hospitals–Military, VA, other government employed Drs.Hospital Administration•Recognized as a profession since early 1900’s.•Experts in organization and finance•Focusing on market share•Strategic positioning•Structure with physicians & other providers•Planning for emergency situationsHospital Governance•Depends on hospital type•Not-for-profit: 52%, Board of Trustees–Community leaders & business people–Diminishing role as hospitals use debt financing•For Profit: 13%, Board of Directors–Shareholders•State and Local Government: 20%–Board of County Commissioners & advisorsHospital Systems•Freestanding hospitals—rare, rural•Cooperative agreements, joint ventures, organizational linkage•Public hospitals—unlikely to be linked, “safety net” for indigent care•Hot Topic: acquisitions and mergers at the national scope (like HCA)Horizontal Integration•Development of Continuum of Care•Hospitals joining with hospitals and other hospital based services to expand market share and reachVertical Integration•Hospital captures and controls more patient care that leads to and from in-patient services–Out-patient services–Urgent Care Centers–HOSPITALIZATION–Rehabilitation Center–Nursing HomeHospital Revenue SourcesUncompensated Care•Any person who presents at the ER has the right to receive treatment if the hospital participates in Medicare. •Voluntary and Private hospitals must at least stabilize the patient before transfer to a public hospital.Uncompensated Care•Big financial implications to hospitals•Unevenly distributed•About 6% of care is uncompensated•Urban, public hospitals: 1/3 US total•Major teaching hospitals, 3x market share in uncompensated careRegulation of Hospitals•Quality of Care–Licensure, Medicare/Medicaid, JCAHO•Utilization:–Medicare’s (QIO); payer’s utilization review•Capital Development: no current restrictions•Costs/Provider Payment:–Periodic freezes on Medicare/Medicaid–Cost-containment boards like in FloridaRegulation v. Competition•Healthcare: social good or market good?•Regulation prevents true competition•However, can hospitals be truly competitive? –Cost containment measures–Social role–For Profit hospitals, offering only profitable servicesMore Financing Issues•Medical Teaching Adjustment Funds–SSA 1965, GME provision (more tests, more supplies, more staff)•Medicare/Medicaid Disproportionate Share Funds –Catch-up mechanism of PPS for hospitals with a disproportionate share of low income patients.Hospitals in Transition•Reimbursement changes lead to care changes.•Medicare PPS—push to more outpatient services, shorter lengths of stay•Acquisitions and Mergers (1980’s)—efficiency v. market share•Downsizing: resulting from mergers and duplications of services, closing of smaller rural hospitalsSummary•The hospital was once the hub of patient care, now it is part of a network of patient care.•Hospitals and the administrators who run them must stay abreast of the changing market place in order to stay financially


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MASON HSCI 678 - Chapter 9 Hospitals

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