Hospitals (part 1)

1. Hospitals(part 1)

2. Objectives • Review the history of the development of hospitals in the U.S. health care system • Learn of common hospital terms and current hospital trends • Discuss the various types of hospitals that comprise the hospital industry

3. Hospitals • An institution with at least six beds providing inpatient care • Delivers diagnostic and therapeutic patient services • Licensed • Organized physician staff • Continuous nursing services under RN supervision • Designated governing body or board • Full-time chief executive officer (CEO) • Maintain medical records • Pharmacy services • Food services • Meet building, fire protection, and sanitation standards

4. Common Hospital Terms • Inpatient = patient staying overnight in facility • Discharges = total number of patients released from a hospital’s acute care beds during a given period • Inpatient day = night spent in the hospital by a patient (i.e., patient day, hospital day) • Average length of stay (ALOS) = average number of days patients spend in the hospital • Days of care = total number of inpatient days incurred by a population over a given period

5. Common Hospital Terms • Capacity = number of set up & staffed beds • Census = number of patients in hospital that day • Patient days = cumulative census • Average daily census (ADC) = average census over a given period of time • Occupancy rate = percentage of capacity used during a given period of time

6. The History of U.S. Hospitals • Evolved from almshouses & pesthouses • Evolved from government-run to community institutions supported through charitable donations • Evolved with medical discoveries • Anesthesia, sterilization, antiseptics, diagnostic technology • Hospitals provided physicians with practical training and access to technology, becoming a necessity and attracting private payers (generating a profit)

7. The History of U.S. Hospitals • Most hospitals in the late 19th and early 20th century functioned as almshouses and pesthouses. • Places for the poor • Funded by private charity • Those who had money could afford to die at home. • As medical science advanced the hospital came to the center of medical care • Hill Burton Act of 1946 provided funding to refurbish old hospitals and to build new hospitals

8. The History of U.S. Hospitals • The increased prevalence of health insurance in the 1950s resulted in an increase in demand for hospital services • Creation of Medicare & Medicaid increased demand • Period of downsizing • Introduction of Prospective Payment Systems • Growth of managed care

9. Hospitals by Type by Year

10. Hospital Beds by Type By year (in 1,000)

11. Occupancy

12. U.S. Hospitals Today • Ultramodern facilities providing high-tech services • Hospitals often referred to as “medical centers” • High levels of specialization, wide scope of services • Many facilities affiliated with university-based medical schools, promoting education and research • Complex organizations • Local market pressures prompting consolidation, mergers & affiliations • Development of multi-hospital systems & clusters • Diversification & expansion of service offerings • OP clinics, ASC, Imaging centers, Home care, Fitness & wellness • Aim to acquire power in local markets

13. Hospital Trends • Hospital ALOS on the decline • PPS encouraging “quicker and sicker” discharges • Managed care limiting hospital stays • Growth of alternative services • Movement to outpatient settings • 84% of U.S. community hospitals have less than 300 beds • Rural hospitals average 65 beds; urban hospitals 231 • 5.7 million hospital employees (40% of health care workforce, 4% of employed civilians) • Current trend is to downsize employment • Average hourly earnings highest among healthcare sites

14. Issues Affecting Hospitals • Technology • Efficiency, legitimacy, expenses • Quality & accountability • Outcomes, legitimacy, expenses, transparency • Between 44,000 and 98,000 people die in US hospitals each year because of preventative medical errors (IOM) • Health systems & health networks • Consolidation & “clusters” • Health systems: arrangement among hospitals, physicians, and other provider organizations that involve direct ownership of assets on the part of the parent system • Health network: strategic alliance that involves contractual arrangements among hospitals, physicians, and other health services organizations • Integration: vertical & horizontal • Improves efficiency, competitive position, bargaining position, and market coverage

15. Types of Hospitals • Community hospitals • Public hospitals • Private hospitals • Nonprofit • For-profit • Rural hospitals • Teaching hospitals • General hospitals • Specialty hospitals • Psychiatric • Rehabilitation • Children’s • Cardiac • Surgical • Orthopedic

16. Community Hospitals • Nonfederal, short-stay hospitals whose services are available to the general public • Excludes federal hospitals (e.g., VA, prisons) • Excludes long-stay hospitals (e.g., psychiatric facilities, chronic disease hospitals) • Can be private or can be operated by local and state governments • Can be general or specialty hospitals • ALOS must be 30 days or fewer

17. Public Hospitals • Hospitals owned by agencies of federal, state, or local governments • 19% of U.S. hospital bed capacity • Not necessarily open to the general public

18. Private Nonprofit Hospitals • Also called voluntary hospitals • 60% of U.S. hospital beds & most multi-hospital systems • Operated by community associations, philanthropic foundations, fraternal orders, etc. • Donations & endowments help cover expenses in addition to patient fees & third-party reimbursements • Religious-affiliated groups play a significant role in operating multi-hospital systems (e.g., Catholic, Protestant, Jewish) • History of caring for communities, observing religious practices • Do not discriminate access to care but are sensitive to spiritual needs of sponsoring denomination

19. Private For-Profit Hospitals • Also called proprietary or investor-owned hospitals • Owned by individuals, partnerships, or corporations • Operated for financial benefit & investment return to stockholders • Achieves goal by providing high quality care at reasonable price • Some of the largest multi-hospital chains are private for-profit systems (e.g., HCA, Tenet, CHS) • Originally flourished at beginning of 20th century as physicians established small hospitals to hospitalize their patients • Many freestanding proprietary hospitals closed or were acquired • Current trend of increased building or acquisition of hospitals by large investor-owned corporations

20. General vs. Specialty Hospitals • General hospitals • Provide diagnostic, treatment, and surgical services for patients with a variety of acute medical conditions • Many hospitals in the U.S. are general hospitals • Provide a broader range of services for a larger variety of conditions as opposed to specialty hospitals • Specialty hospitals • Admit only certain types of patients or those with specific illnesses or conditions • Increasing competition has fueled the growth of specialty hospitals that provide treatments available in many general hospitals • Psychiatric, rehabilitation, children’s, cardiac, surgical, etc.

21. Psychiatric Hospitals • Provide diagnostic and treatment services for patients who have psychiatric illness • Psychiatric services • Psychological services • Social work services • Must have written agreement with a general hospital for the transfer of patients requiring medical, obstetric, or surgical care

22. Rehabilitation Hospitals • Provide therapeutic & rehabilitative services to restore maximum level of functioning to patients suffering recent disability due to illness or accident • Stroke, spinal cord injury, traumatic brain injury (TBI), debility, amputation, joint replacement, hip fracture • Patients often transferred from general acute care facilities • Length-of-stay averages approximately 2 weeks • Physical, occupational, & speech therapy

23. Children’s Hospitals • Special facilities and trained staff deal with unique medical problems of children • 75% of inpatients are treated for chronic and congenital conditions • The remainder often require intensive care for conditions such as cystic fibrosis, cancer, transplant, etc. • Account for less than 4% of all U.S. hospitals but provide vast majority of highly specialized care for children • Equipment and furnishings specially designed for children

24. Rural Hospitals • Located in a county that is not part of a metropolitan statistical area (MSA) • MSA = Geographical area including at least one city with population greater than 50,000 or urbanized area with population of 50,000 and total MSA population of over 100,000 • Treat larger percentage of poor and elderly patients • Face financial troubles, threat of closure • Critical access designation

25. Teaching Hospitals • Offers one or more graduate residency programs approved by the AMA • Primary role of training physicians • Major and minor teaching institutions • Depends upon number and type of residency programs offered • Most affiliated with medical schools of large universities • Substantial teaching and research activities • Cutting edge of medicine & technology • Often deliver specialized care for complex problems, including unique tertiary care services • Burn care, trauma care, organ transplantation • Often serve disproportionate share of poor population

26. What We’ve Learned • Review of hospitals’ history • Common hospital terms • Current trends in hospitals • Types of hospitals & examples