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US Healthcare > Hospitals > Flashcards

Hospitals Flashcards

1
Q

4 types of hospitals?

most common?

A

Non-profit (most common): ~60%, same over time

For-profit: increased over time

Public: city/state level operated, serving low-income/uninsured individuals (decreased over time

Non-community: federal, psych, long-term care

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2
Q

Hospital Trends

% of total spending: Hospital medical care has been _ over time

Beds: Rural vs Urban

Hospital size: Rural vs Urban

outpatient surgeries have been _ over time

number of beds per capita has been _ over time

the number of hospital admissions per capita has either _ or held steady

A

Hospital Trends

% of total spending: Hospital medical care has been decreasing over time

Beds: Rural < Urban

Hospital size: Rural < Urban

outpatient surgeries have been increasing over time

the number of beds per capita has been decreasing over time

the number of hospital admissions per capita has either decreased or held steady

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3
Q

2000s had an increase (and subsequent moratorium) in physician-owned specialty hospitals

Concerns?

A

2000s had an increase (and subsequent moratorium) in physician-owned specialty hospitals

Concerns?

  • they are profiting off of the Medicare DRG payment system because some DRGs were more profitable than others
  • The potential for a physician to direct the more profitable patients to their own physician-owned specialty hospitals
  • direct the less profitable patients away to a community hospital
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4
Q

There has been a _ in the proportion of hospitals that are public hospitals over time, while there has been an _ in the proportion of hospitals that are for-profit, investor-owned hospitals

why?

A

There has been a decrease in the proportion of hospitals that are public hospitals over time, while there has been an increase in the proportion of hospitals that are for-profit, investor-owned hospitals

why?

Closures vs openings

  • more closures than openings

Conversions

  • public hospitals being converted to either nonprofit or for-profit hospitals
  • nonprofit hospitals being converted to for-profit hospitals
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5
Q

Hospital length of stay has _.

WHY?

A
  • Hospital length of stay has decreased
  • WHY?
    • Technology: less-invasive/ new procedures
      • shift some surgeries to outpatient
    • Medicare switch to DRG/IPPS
      • switch from cost-based retrospective payments
    • Private insurers’ use of capitation or managed care
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6
Q

US # of beds and cost compared to other countries

A

US # of beds and cost compared to other countries

  • We have less beds, but spend more
    • means we spend more per admission
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7
Q

Describe a Non-Profit hospital

Cost vs Revenue

Direct benefit of being non-profit (3 tax exemptions)

Indirect benefits (2)

the underlying goal of designating hospitals

A

Describe a Non-Profit hospital

  • Non-profits are exempt from paying most taxes

Cost vs Revenue

  • If revenue > cost, money is invested back into hospital

Direct benefit of being non-profit (3 tax exemptions)

  • Exempt from paying _ taxes
    • income taxes
    • property taxes
    • local sales tax

Indirect benefits (2)

  • Can receive
    • charitable donation
    • lower-interest loans

The underlying goal of designating hospitals

  • hospital’s forgone taxes are exceeded by its community benefit
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8
Q

Describe 3 types of community benefits for non-profits

A

Describe 3 types of community benefits for non-profits

  • Charity care to uninsured
  • unreimbursed costs for means-tested gov programs (difference from Medicaid/care and cost incurred)
  • Subsidized health services
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9
Q

unreimbursed costs for means-tested government programs CONTROVERSY

Direct and indirect solution

A

unreimbursed costs for means-tested government programs CONTROVERSY

  • Medicaid payments are slightly higher than Medicare payments now
    • No unreimbursed cost for Medicaid

Direct solution

  • alter Medicaid rates

indirectly

  • making up for cost with non-profit tax emeption
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10
Q

Controversy about community benefit amount and forgone taxes

A

Controversy about community benefit amount and forgone taxes

  • For-profit hospitals also provide these community benefits (though not as much as nonprofits)
  • CBNP – CBFP > foregone taxes?
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11
Q

Possible solutions to community benefit controversy (3)

A

possible solutions

  • require increases in nonprofit community benefits
  • limit the number of non-profits by having the IRS grant fewer
  • use the increased tax revenues to directly fund those benefits
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12
Q

Publics perspective on non profits

adv vs dis adv of community benefits

A

Advanatge:

  • Community benefits achieved

disadvantage

  • the level of community benefits aren’t actually high enough
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13
Q

knock on non-profit hospitals

community benefit

admins

size and stature?

A
  • Level of community benefit similar to for-profit hospitals
  • less accountability of administrators (no investors focusing on rate of return)
  • Focused on size and stature of hospital and not on value (high tech services)
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14
Q
A
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15
Q

Why are there so many non-profits? (2)

A

Why are there so many non-profits? (2)

  • 1900s reliance on charitable donations to serve the poor/dying
    • a charitable mission was ingrained in most hospitals
  • 1946 Hill-Burton Act: requirement to access construction and modernization funds
    • had to have a charitable mission
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16
Q

Advantages of market competition (many small hospitals) (3)

A

Advantages of market competition (many small hospitals) (3)

  • Lower prices less bargaining power (for private insurers)
  • Compete on quality of care rather than price
    • fixed administered prices i.e DRGs
  • Increased access to care – minimize travel time to a hospital
17
Q

Advantages of market concentration (few large hospitals) (3)

A
  • Economies of scale (lower costs)
    • hospitals becoming more efficient as they get larger
  • Hospitals have “centers of excellence”
    • experts concentrated in one location
  • Reduction in the “medical arms race”
    • duplication of capital-intensive services
    • led to the passage of certificate of need laws
18
Q

M&A Horizontal

M&A Vertical

What 2 periods saw a rise in M&A?

A

M&A Horizontal

  • Hospitals coming together

M&A Vertical

  • hospital buying a physicians office

What 2 periods saw a rise in M&A?

  • 1990s in response to managed care (bargaining power)
  • 2010s w/ ACA ACO Provision (easier to operate as an ACO w/ bigger)
19
Q

Medicare payments to hospitals

negative margins?

Federal Medicare payments vs state Medicaid payments

A

Yield negative margins, Why?

  • Prices below the costs incurred

Medicare (DRGs)/Medicaid (either DRGs, per diem, or FFS)

  • federal Medicare program uses the Prospective Payment System DRGs
  • State Medicaid programs have discretion in determining their payment rate/ model
20
Q

Private insurance payments to hospitals?

Issue of price transparency for consumers?

A

Private insurance payments to hospitals?

  • negotiated prices with a discount off of the “ charge master ” list

Issue of price transparency for consumers?

  • HDHP/HSAs- Patients using their own money to purchase health care will become more cost-conscious
  • there is too much info for them to be able to shop like informed consumers
21
Q

Variation in Hospital Payments across the Three Main Payers

three main takeaways

  • price comparison
  • public vs total cost
  • cost shifting
A

Variation in Hospital Payments across the Three Main Payers

three main takeaways

  • at any point in time, private payers on ave. pay 30-40% more than Medicare, Medicare > Medicaid payments
  • comparisons of 100% cost line and public payments showing public payments not covering cost
  • increases in public payment rates associated with decreases in private payment rates aka cost-shifting
22
Q

Uninsured charity care

American Hospital Association (AHA)’s guidelines:

A

Uninsured charity care

American Hospital Association (AHA)’s guidelines:

Patients under 100% FPL

  • free care

Patients between 100% and 200% FPL

  • public or private insurer’s price

Patients above 200% FPL

  • hospital’s discretion
23
Q

Maryland’s All payer Hospital Rate Setting System

All payers (private and public) pay _ _ for _ services; rate set by _ _ _ _ Comission

Includes _ for uninsured charity care pool (discontinued in 2014)

HSCRC determines _ budget for each hospital and CMS _ test which focuses on _

A

Maryland’s All payer Hospital Rate Setting System

All payers (private and public) pay same rate for hospital services; rate set by Health Services Cost Review Commission

Includes surcharge for uninsured charity care (discontinued in 2014)

HSCR determines global budget for each hospital and CMS waiver test which focuses on growth in all payer all hospital costs per beneficiary

  • deviating from Medicare’s IPPS/DRG payments

US Healthcare (4 decks)

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