Topics

1. Topics • Terminology • History of Hospitals • Hospital Expansion Phases • Hospital Downsizing Phase • Hospital Organization • Nonprofit Hospitals • Hospital Management • Ethical and Legal Issues “It may seem a strange principle to enunciate as the very first requirement in a hospital that it should do the sick no harm” Florence Nightingale

2. Terminology • “Inpatient” involves an overnight stay at a healthcare facility • “Outpatient” does not • Usage is not dependent on the • Severity of the condition • Complexity of the treatment

3. Terminology (cont.) • “Hospital” • At least six beds (why not five?) • Organized physician staff • Licensed • Continuous nursing services • On site pharmacy services • Governing body and chief executive • Food service • Medical records services Which of these characteristics does a nursing home lack?

4. History of Hospitals • Book identifies five distinct phases • Primitive institutions of social welfare • Distinct institutions for care of the sick • Organized institutions of medical practice • Advanced institutions of medical training and research • Consolidated systems of health services delivery • We are interested in the drivers of transformation between stages • Help identify future trends

5. History of Hospitals (cont.) • Primitive Institutions of Social Welfare • Through the late 1800s • “Poorhouses” for the destitute • Little medical treatment • “Pesthouses” isolated the sick with contagious diseases • Very few of these institutions • Restricted to a few urban areas

6. History of Hospitals (cont.) • Distinct Institutions to Care for the Sick • Became widespread in the late 1800s • A few notable exceptions prior to this time • Differentiated from the Poorhouses and Pesthouses • Medical care was provided • A treatable illness was expected • Why did we see such low prominence for hospitals in the HC system? • Or, where was healthcare coming from?

7. History of Hospitals (cont.) • Organized Institutions for Medical Practice • Late 1800s/Early 1900s saw huge transformations in the practice of medicine • What were they? • Hint: Contrast with medical effectiveness in the past • How did they affect hospitals? • Hospitals became centers of medical practice • Why? (This is hugely important)

8. History of Hospitals (cont.) • Organized Institutions for Medical Practice (cont.) • Hospitals required professional management and organization • Departmental organization became common (why?) • Management had to focus on efficiency • Hospitals shifted focus to the acute stage of an illness • Early cost containment strategy

9. History of Hospitals (cont.) • Medical Teaching and Research • Shift in medical care to hospitals resulted in • Shift in medical education to hospital-centered knowledge • Tight coupling between (some) hospitals and medical schools • Partnerships • Unified ownership • Hospital practice for internships and residencies

10. History of Hospitals (cont.) • Consolidated HC Delivery Systems • Late 20th Century changes have lead to new models for hospitals • Economic pressures • Technological advances • Cost pressures and technologies have reduced hospital stays • Excess bed capacity → consolidation • Competition from new providers • Outpatient surgery centers • Imaging centers More Coming Up

11. Hospital Expansion Phase • Hospitals expanded exponentially from late 1800s through mid 1980s • Six drivers of expansion • Advances in medical science • Development of specialized technology • Advances in medical education • Development of professional nursing • Increased health insurance • Government involvement • Construction • Medicare and Medicaid

12. Hospital Expansion Phase (cont.)

13. Hospital Downsizing Phase

14. Hospital Downsizing Phase (cont.)

15. Hospital Downsizing Phase (cont.) • Pressures on Hospitals • Increased cost controls → Decreased reimbursement • Shorter stays • Fewer admissions • Increased competition • Improved technologies made more procedures outpatient

16. Hospital Downsizing Phase (cont.) • Downsizing affected hospitals in two ways • Hospital closings • Marginal hospitals failed • Smaller hospitals hard hit • Rural hospitals hard hit • Hospital mergers and acquisitions • Smaller and non-profit hospitals absorbed by larger chains • Chains seeking to increase capacity in advance of the baby book entering old age

17. Hospital Downsizing Phase (cont.) • What are the implications of these figures?

18. Hospital Organization • Hospitals come in a wide variety of • Ownership models • Services offered • Multi-hospitalstructure

19. Hospital Organization (cont.) • Public Hospitals • Government owned and operated • Federal ownership exclusively for special populations • State, county, & municipal focused on service to public • High proportion of lower income and uninsured • Financial and economic pressures squeezing these institutions • Community Hospital—open to all comers

20. Hospital Organization (cont.) • Hospital Chains • See staffing differences between independent and chain hospitals (Table 8-3) • Hospital chains realize economies of scope and scale • Administrative overhead • Billing and reimbursement • Facilities management • Governance • Information technology investments • Lengthen the value chain

21. Hospital Organization (cont.) • Types of Hospitals • General hospitals • Most common • Provide wide range of services • Specialty hospitals • Rehabilitation • Focused disease (cardiac, cancer) • Psychiatric • Children’s or Women’s and Children’s

22. Hospital Organization (cont.) • Rural vs. Urban Hospitals • Urban (county population > 100,000) • Higher costs • Broader scope of services • Rural • Disproportionate number of poor • Cannot employ many specialist staff and facilities full time • Funding increases available if designated a Critical Access Hospital

23. Hospital Organization (cont.) • Operational costs by size

24. Hospital Organization (cont.) • Teaching Hospitals • Offer residency programs • Receive targeted Medicare funding • Associated with a medical school (“Academic Medical Center”) • Training • Research • Tertiary care in one or more specialties

25. Nonprofit Hospitals • 80% of all private hospitals and 84% of all private hospital beds are nonprofit • Legal definition of nonprofit must be clearly understood • Research discloses little difference in the behavior between for-profit and nonprofit hospitals of similar size and location • Nonprofit hospitals receive significant tax benefits • Under review to justify these exemptions

26. Hospital Management • Hospitals are complex organizations • (But not the most complex) • Multiple stakeholders (List these groups!!) • Parallel governance structures distinctive • Administrative management • Medical staff • Objectives often at odds with each other • Some staff accountable to both authority chains • Pharmacy ‒ Nursing • Lab ‒ etc.

27. Hospital Management (cont.) • Hospitals require licensure, accreditation, and various other certifications • Affect ability to operate • Affect ability to provide reimbursable services • Hospital management must continuously monitor criteria for certifications, etc.

28. Ethical and Legal Issues • Healthcare is fraught with opportunities for unethical behavior regardless of motivation • Fraud and many other acts are clearly wrong • But HC providers have ethical duties to respect patient wishes even… • …if patient does not understand the science • …patient over- or undervalues a treatment • …patient does not understand the risk • Patients (or surrogate) must give consent for treatment

29. Ethical and Legal Issues (cont.) • Many practical ethical issues in HC revolve around “informed consent” • Patient understands the treatment and risks • Patient elects the treatment • Patients are not always able to make informed consent • Minor children • Medically incompetent • Advanced Directives can direct care in the event patient cannot