605: Hospitals Flashcards
Hospitals
- Before modern medicine
- Earlly 1900s
- After 1930
- 1940s
- 1965
- 1970s -1980s
- Before modern medicine
- Institutional warehouses for the poor, ill, homeless, mentally ill
- Little treatment, little hope
- Earlly 1900s
- Transformation began - assisted by development of medical technology
- Treatment possibilities were expanded
- Hospitals became centers for healing
- After 1930
- Greater availability of private insurance led to increased demand for hospital services
- 1940s
- Existence of hospital shortage was alleged
- Hospital Survey & Construction Act of 1946 (Hill-Burton Act)
- Provided federal grants to states for construction of new hospital or enlarged hospitals (more beds)
- 1965
- Medicare and Medicaid - increased availability of hospital insurance and demand for hospital care
- 1970s-1980s
- Hospital costs increased rapidly
- 1982 Tax Equity & Fiscal Responsibility Act (TEFRA) madated use of DRGs beginning in 1983
Changes in hospital operations since 1960
- New technologies; specialized services
- Growth of for-profit hospitals and corporations
- Vertical and horizontal integration - led to larger, more complex hospital organizations
- Managed care and reimbursement changes
- DRGs and prosepective reimbursement: shift of some care to ambulatory care settings > resulted in hospital cases being the more complex cases > increased costs
- Growth of information systems
- Focus on quality of care and accreditation (“Joint Commission” - formerly JCAHO)
- Larger uninsured population - EMTALA of 1986 (requires EDs to tx uninsured)
Current and future challenges
- Changing and competitive environment
- Mangaged Care and ACA - controlling readmissions
- Balancing cost increases and payment decreases
- Personnel shortages (will RN shortage return?)
- Unionization
- Increasing regulations (regulatory compliance)
- Focus on patient safety and medical errors (ACA has financial penalties for “errors”/readmissions)
- Earthquake building standards (will they be enforced?)
- Supposed to be done by 2008, pushed to 2013, then pushed to 2020
Hospital expenditures and sources of funding
Expenditures:
- Expenditures on hospital services represent 32.1% of total health expenditures in 2013
- Down from 39.3% in 1980
Sources of funding:
- 3.5% out-of-pocket
- 37.1% private insurance
- 25.9% Medicare
- 17.5% Medicaid
*Medicare + Medicaid equals about 44% of funding
Percent hospital expenditure: (changes since 1960)
Change from 39.3% in 1980 to 30.2% in 2000
- Big change! (DRGs)
- Has gone up slightly (to 32%) since 2000
Distribution of outpatient vs. inpatient revenues
27% of hospital revenues came from outpatient services in early 90s
45% of hospital revenues came from outpatient services in 2013
*** % of outpt revenue increased 18% in just 2 decades
How hospitals are classified (hospital classification)
- Length of stay:
- Short-term hospital: avg LOS < 30 days
- Long-term hospital: avg LOS > 30 days
- Type of major services:
- General (acute care)
- Specialty: psychiatric, rehabilitation, children’s
- Bed size
- How many beds does the hospital have
- Teaching status
- Teaching hospital: have residency program(s)
- Academic medical center: includes a medical school
- provide primary, secondary and tertiary care
- clinical medical research
- costs are often higher due to teaching and research
- revenue is often lower due to a higher uninsured population
- gov’t provides a little more funding for hospitals b/c of this (but under ACA additional funding might be removed)
- Urban vs. Rural (concern about financial viability of rural hospitals > if closed would result in access to care issues)
- Ownership (e.g. nonprofit, for profit, district, public)
Hospital ownership
Nonprofit
- Established as 501(c)(3) institution
- Satifies IRS code as nonprofit institution
- Exempt from federal, state, and local taxes
District
- Receive some (usually very small) amount of revenue from taxes levied on community in which they are located
- Otherwise look like non-profits
- Originally was a mechanism to get hospitals to locate in a community - people were willing to pay small tax amount to have a hospital in their area (this was more important in the past than now, but they still exist)
For-profit
- Proprietary; Investor-Owned
- Often part of multi-hospital chains
- Distribute profits to shareholders
Public; Government
- Federal, State, and Local hospitals
- “Providers of last resort”
- VA and military hospitals
Definition of “community hospitals”
- Nonfederal, available to the public
- Short term (avg LOS < 30 days)
- Provide general acute services
Hospital Licensure and Accreditation
- State Department of Health oversees licensure of hospitals
- Must be licensed to operate
- Meet certain minimum standards for space, equipment, personnel, safety, etc.
- Medicare certification
- Required if want to be reimbursed for Medicare and Medicaid pts
- Focuses on quality of care and patient safety
Hospital accreditation:
- Joint Commission accredits hospitals
- Private, nonprofit group formed in 1952
- Formerly Joint Commission for Accreditation of Healthcare Organizations (JCAHO)
- Sets performance standards
- Hospitals accredited by Joint Commission automatically satisfy Medicare certification
% of hospitals by ownership (comparing 1980, 1990, 2000, 2012)
- Nonprofit
- For-profit
- State and local
- Federal
% of beds by type of hospital/ownership (comparing 1980, 1990, 2000, 2012)
- Nonprofit
- For-profit
- State and local
- Federal
% hospitals by ownership
- Nonprofit: 53.7% in 1980 to 55.5% in 2012 (greater than half of hospitals are nonprofit)
- For-profit: 11.8% in 1980 to 20.5% in 2012 (# almost doubled)
- State and local: 28.7% in 1980 to 19.9% in 2012 (# dropped by almost 10% since 1980)
- Federal: 5.8% in 1980 to 4% in 2012 (small decrease)
# Beds
- Nonprofit: Hasn’t changed much since - currently have 65% of all hospital beds (tend to have more beds/hospital on avg - larger hospitals)
- For-profit: 7.9% of beds in 1980; 16% of beds in 2012 (doubled)
- State and local: 18.9% of beds in 1980; 14.3% in 2012 (big drop)
- Federal: 10.6% in 1980; 4.6% in 2012 (big drop)
Distribution of hospitals and beds (what percent of hospitals have what percent of beds by size of hospital/bed size)
33% of hospitals are very small (1-49 beds), but despite the large number of hospitals, they only have about 5.8% of all beds
Large hospitals (with 300+ beds) constitute 16% of hospitals, but >50% of beds
Hospital beds per 1000 population (U.S. distribution)
- Overall distribution (difference between regions)
- U.S. average (# beds/1000 pop.) since 1980 - how has number changed
- California: # of beds per 1000 pop. (states with lower # beds/1000 than CA)
- how has number changed since 1980
- Western states: lowest # of beds per capita
- East coast (with exception of DC): low # of beds per capita
- States in center of U.S.: ># of beds per capita (less populous states? health status?)
US averages: # of beds/1000 population
- 1980: 4.5
- 1990: 3.7
- 2000: 2.9
- 2012: 2.6
California: 1.8 beds per 1000 population (down from 1.9 2 years earlier)
- CA has fewer beds/1000 population as compared to U.S. overall (hasn’t changed much overall - avg in both U.S. and CA has decreased)
- Only three states have lower # beds/1000 than CA:
- Oregon 1.7
- Washington and Utah: 1.8
- Change in # since 1980:
- 1980: 3.6 (80% of U.S. avg)
- 1990: 2.7 (73% of U.S. avg)
- 2000: 2.1 (72.4% of U.S. avg)
- 2012: 1.9 (73.1% of U.S. avg)
Hospital readmissions
- What are readmissions a marker of?
- What impact does the ACA have on readmissions?
- Hospital readmissions in San Diego (and implications of this)
- Marker of quality care
- Higher readmission rates possibly indicative of lower quality of care (or at least pt outcomes)
- Affordable Care Act:
- Decreases payments (for all Medicare pts) to hospitals with “excessive” readmissions (began 10/2012)
- Initially is focusing on readmissions for: Acute MI, Heart Failure, Pneumonia
San Diego:
- 24% of all 30-day readmissions occur at different hospital than first admission
- 15% of all ED pts and 69% of “frequent fliers” seen at multiple hospitals
- **Implications for health information exchange (access to pt data by all hospitals in community)?
Integrated Health System (IDS)
- Defintion
- Why they arose
- Integration strategies
Growth in joint ventures, mergers, acquisitions
- Response to increasingly competitive environment
- Response to cost pressures (changes in reimbursement and regulation)
Integration strategies:
-
Horizontal integration:
- Combination/affiliation of similar units
- e.g. merger or aquisition of short-term acute hospitals in same geographic area (e.g. Grossmont Hospital became Sharp Grossmont; Mercy Hospital became Scripps Mercy)
- Objectives:
- Increase operational efficiences and economies of scale (larger scale operations can save costs - e.g. like buying in bulk)
- Enhance competitive posture (reduce competition since combining similar units in area)
-
Vertical integration:
- Combination/affiliation of different types and levels of services
- IDS includes different products to deliver services
- e.g. inpt, ambulatory care, mental health, home health, LTC, etc.
- Stimulated by contractual arrangements to have all services availables
- facilitates contracts with MCOs and other insurance companies if all services are provided by one organization (“one-stop shopping”); give negotiation advantage
- Patient feeder to other product lines (keep pts w/in the IDS)
- IDS includes different products to deliver services
- Combination/affiliation of different types and levels of services
Number of hospitals that are in “health systems” (how has this changed from 2003 to 2013)
Major trend over past decade for hospitals to join health systems.
Increased from 53.6% to 63.2% of all community hospitals in 10 years (increased by about 10% over the decade)
Triage status of ED patients (time pt should be seen in and % of pts that fall into each category)
Time pts spend in ED
Well over 3 of every 5 patients spends over 2 hrs in ED
Percent of ED visits by age (comparing 2001 to 2011)
% ED visits over a 12 month period: Medicaid vs. Uninsured vs. Private insurance (under 18 y.o. vs. 18-64 y.o.)
Medicaid beneficiaries are more likely to have at least one or more ED visits per year than uninsured or privately insured people.
