KHS 412 Ch. 8, 9

private non-profit

Over half of all US hospitals are... and they are tax exempt

Private Nonprofit Hospitals

may be called voluntary hospitals. Their primary mission is to benefit the communities in which they are located.

An inpatient stay within a hospital

means formal admission into an institution for at overnight stay (> 24 Hours).

Stage 6:

mergers and other formal affiliations have created health systems in large urban areas.

Managed care ("MC")

"an organized approach to delivering comprehensive array of health services to a group of enrolled members through efficient management of services needed by the members and negotiation of prices or payment arrangements with providers."

How Health Maintenance Organizations (HMOs) differ from other plans

(1) cover both illness and preventive services, (2) emphasize primary care as the point of first contact and PCPs coordinate secondary care, (3) use capitation as their reimbursement scheme, (4) rely on in-network providers to deliver in- and out-patient services while some may allow out-of-network care for higher out-of-pocket costs, and (5) are responsible for ensuring their quality of care based on standards.

A

1. What term listed below refers to a health care facility that delivers a range of clinical services with at least 6 inpatient beds? A. Hospital B. Emergency Department C. Clinic D. Managed Care Organization E. Accountable Care Organization

C

10. Which process identified below results in a hospital receiving permission from CMS to participate in federal health insurance programs based its compliance with the terms, conditions, and regulations controlling its participation? A. Licensure B. Accreditation C. Certification D. Qualification E. Validation

E. All the above are correct choices.

11. Which mechanisms identified below enable managed care organizations to control health care consumption by its plan members? A. Choice Restrictions B. Gatekeeping C. Case Management D. Practice Profiling E. All the above are correct choices.

C

12. Which QFM component identified below relies on capitation, discounted fees, and salaries to reimburse their health care providers? A. Financing B. Insurance C. Payment D. Delivery E. Quality

B

2. Which statements made below apply to U.S. hospitals? A. U.S. hospitals require a federal license to operate within U.S. states. B. U.S. hospitals are regulated by federal and state authorities. C. U.S. hospitals define an inpatient stay lasting less than 12 hours. D. U.S. hospitals are governed by state laws and regulations, not federals laws. E. All the above choices are correct.

A

3. Which preindustrial establishment identified below served as an early origin of a hospital because it housed individuals with communicable (infectious) diseases? A. Pest (Plague) Houses B. Almshouses C. Poorhouses D. Infirmaries E. All the above are correct choices.

C

4. Which statements provided below apply to the Hill-Burton Act of 1946 (HBA)? A. The HBA is a state-based granting scheme for hospital construction. B. The HBA continues funding hospital construction in rural America. C. The HBA is a federal program that encouraged hospital construction after WWII. D. The HBA allows hospitals under the Act to turn away uninsured patients. E. All the above are correct choices.

B. Not-For-Profit, Tax Exempt Status

8. What type of tax status identified below does a hospital corporation achieve when it elects IRS Code Sec. 501(c)(3)? A. For-Profit, Taxable Status B. Not-For-Profit, Tax Exempt Status C. C-Corp Status, Tax-Passable Status D. Both a. and c. are correct choices. E. All the above are correct choices.

D

9. What member of a hospital's governance structure below is responsible for representing members of the medical staff, as a liaison with the CEO and Board of Trustees? A. Chief Executive Officer B. Chief Operating Officer C. Nursing Director D. Medical Chief of Staff E. Chief Privacy Officer

the prospective payment system (PPS)

Congress established ...this... based on diagnosis-related groups (DRGs) to control hospital-related reimbursement. A diagnosis-related group (DRG) or CMS-DRG is a patient classification system

Hospital Survey and Construction Act of 1946 aka Hill-Burton Act.

In the 1940s, the severe shortage of hospitals led Congress to pass the...This post-World War II statute provided federal grants to states for their construction of new community-based hospital beds. States, not the federal government, controlled them. Federal funding was necessary to spur construction of these facilities.

Payment:

MCOs allow risk sharing between MCO and providers; puts the burden on providers to curtail unnecessary utilization of services. Three main types: Capitation (per-member per-month): Provider receives same fee regardless enrollee's use of health care services.

Insurance:

MCOs collect premiums for insuring groups of enrollees and assumes insurance risk. Under ACA, an MCO retains no more than 20% of the premium dollar; the remainder of the premium spent on health care services is called the medical loss ratio.

Delivery:

MCOs establish contracts with physicians, clinics, hospitals, and medical systems and use various methods to manage the utilization of health care services. Health care providers operate independently but are linked to the MCO through legal contracts.

Financing

MCOs negotiate their premiums with employers who represent their employees, as beneficiaries.

integrated delivery systems (IDSs) and accountable care organizations (ACOs).

Today, the U.S. health care market includes two main types of highly integrated health care systems:

B

What federal insurance program accounts for the greatest share of the costs for inpatient hospital care? A. Children's Health Insurance Program B. Medicare Part A C. Medicare Part D D. Medicare Part C E. Blue Cross and Blue Shield

C

What term identified below refers to the average number of hospital patients released from acute care beds including those who die within a given time period? A. Average Daily Census B. Inpatient Days C. Discharges D. Occupancy Rate E. Average Discharge Rate

D

Which type of hospital identified below focuses on treating specific diseases or serving specific populations? A. Community Hospitals B. General Hospitals C. Rural Hospitals D. Specialty Hospitals E. Teaching Hospitals

medical loss ratio

a financial measurement term identified in ACA based on a loss ratio. compares the amount of money an insurer spends on its administration to the amount it spends for delivery of health care to its beneficiaries or customers. It represents the share of premium dollar spent on paying out for health care versus the amount spent on administration. Traditionally, health insurers spend more on administration, which consists of salaries for individuals administering plans and their administrative costs.

hospital

an institution that has been licensed by the state that has at least six beds

Exclusive Provider Organization (EPO)

allows plan members to choose from the providers within the network and do not have to have to work with a primary care physician.

Integration Based on Type of Ownership or Affiliation

also creates cooperative arrangements, sharing of resources, and joint responsibilities.

The Patient Self-Determination Ac of 1990

applies to all facilities participating in Medicare or Medicaid. Under this Act, patients have a right to informed consent. They must be informed of treatment choices and make an informed choice, including the choice to refuse treatment. It also addresses advance directives which enable patients to express their wishes regarding continuation or withdrawal of treatment.

Practice Profiling

applies to the development of physician-specific practice patterns and the comparison of individual practice patterns to some norm. This method looks at physician practice characteristics and behaviors. It involves performance measures and report cards.

Acquisitions and Mergers (MAs)

are a form of integration based on legal purchases or agreements.....This.....is a purchase of one organization by another; based on change of ownership....This.....is a mutual agreement unifying two or more organizations into a single entity.

Accountable Care Organizations (ACOs)

are an integrated group of HCPs who work together to deliver coordinated care and take responsibility for quality and efficiency. Disease management, care coordination, sharing of cost savings with providers, and use of information technology. Authorized under the ACA to serve Medicare beneficiaries enrolled in the traditional fee-for-service program.

Virtual Organizations

are new organizations formed through contractual arrangements between two or more entities. The formation of a health network based on contractual arrangements is called

Community Hospitals

are nonfederal, short-stay hospitals. These hospitals serve the public. Nearly 80% of US hospitals are...

Private For-Profit Hospitals

are private investor-owned hospitals.these hospitals are owned by individuals, partnerships, or corporations. Nearly 5% are physician owned

Children's Hospitals

are usually community-based hospitals. They treat infants, toddlers, school-age children, and adolescents. They deliver primary and specialty-based care. They also treat chronic, congenital cardiac and orthopedic pediatric problems. They provide intensive care for a variety of conditions, such as cancer, cystic fibrosis, and tissue transplants. These hospitals may require higher staffing ratios than in general hospitals.

Alliances

arise from an agreement between two or more organizations to share resources without joint ownership of assets. Simpler to form than merger; may be first step that gives both organizations opportunity to evaluate the advantages of a potential merger.

Network Model HMO

arises when HMOs contract with multiple groups to create a "network." The group provides all physician services, and referrals for secondary services may occur at the expense of the referring group. Capitated fees are paid to a given group based on the number of enrollees. This model can offer a wider array of physicians and their services compared to either the staff or group models. Downside is dilution of control over the utilization of services.

Medical paternalism

arises when health decisions are made for, not by, the individual as a patient. Because physicians are knowledgeable, they make decisions for patients, not with them.

almshouses (poorhouses)

before 1850, ... this.... was the main health care institutions and were run by local governments. Remember, US health care during this period was an individual or family-based responsibility. Services in these institutions were more social welfare than to medical care. They supported their patients by providing food and shelter to the destitute and some nursing care to the sick. Conditions were not healthy.

Point-Of-Service (POS) Plan

combines the classic features of HMOs with some features of PPOs related to patient choice. These plans (1) retain the benefits of tight utilization management associated with HMOs while (2) avoiding their restrictiveness on choice. These plans use capitation or other risk sharing arrangements with their providers and gatekeeping to control utilization. Its PPO feature allows enrollees to choose a nonparticipating provider at the point of care or time of service delivery. Enrollees had to pay extra because providers could charge their FFS rates. Again, the rise and fall in the popularity of this model coincides with the rise and fall of restrictions in HMOs. Remember, the market strategies for MCOs changed from profit accrual to market share capture during the late 90s to early 2000 period. This would account for the rise and then fall in enrollment.

Group Model HMO

contracts with single, multispecialty group practice of HCPs. The HMO contracts separately with one or more hospitals to provide comprehensive services for its enrollees.

Distributive justice

deals with persons being treated fairly or equally, especially when the distribution process involves rights or resource allocation. It arises most often when people look at health disparities or consider redistribution or rationing of health care resources.

Specialty Hospitals

deliver a certain type of therapeutic care, such as psychiatry or rehabilitation, or serves only certain types of patients, such as children.

Prospective Utilization Review

determines medical necessity before care is provided. Some plans require the enrollee or provider to obtain prior approval, or precertification.

stage 3

discoveries in medical science (e.g., anesthesia, surgical techniques, antisepsis and sterilization procedures, diagnostic x-rays, and other diagnostic technologies) transformed hospitals into institutions of medical practice and training. These discoveries support the expansion of hospitals during stage 4 and beyond. During this stage, nursing and medicine shifted from trades to professions. The nursing profession improved hospital care.

stage 4

emergence of small proprietary (for-profit) hospitals opened by physicians mainly to attract well-to-do patients. For-profit status would give way to non-profits after WW II with the passage of the Hill-Burton Act. This act supported a boom in post-WW II hospital construction by the several states (See below).

Staff Model HMO

employs salaried physicians who work for the HMO and provide services to its enrollees. This model offers greater degrees of control over practice patterns and they can offer one-stop-shopping for enrollees. Fixed salaries may be high, which required increased numbers of enrollees to support the model. There may be a limited number of physicians.

average length of stay (ALOS)

equals the average days of care divided by the discharges. The authors note utilization varies depending on the demographic groups. Usage is higher for (1) individuals over 75, (2) children < 1 year, (3) males > females, (4) blacks > whites, and (5) lower socioeconomic groups > affluent ones. With respect to socioeconomic groups, utilization may be influenced by managed care.

Measures of Utilization

focus on inpatient days of care or average length of a patient stay.

Paternalism

focuses on deciding what is best for others and undermines personal autonomy in decision-making.

Retrospective Utilization Review

follows delivery of services and involves examination of medical records to determine appropriateness.

General Hospitals

form the bulk of most US hospitals. They treat a wide variety of health conditions, both general and specialized.

three basic types of managed care models.

health maintenance organization (HMO), preferred provider organization (PPO), and point-of-service (POS) models

measure of access

hospital access is measured by the number of discharges or the total number of patients discharged from a hospital's acute care beds during a given period. It is usually measured by the number of discharges per 1,000 people. Because newborn infants are not included in admissions, discharges provide a more accurate measure of the number of people served by a hospital.

Stage 2, after the 1850s

hospitals began to transition from being primarily government-run institutions to community-owned institutions supported mainly through private charitable donations. Though mainly financed by wealthy donors, these hospitals primarily served the poor.

Public Trust

important factor in the daily operations of a hospital. Many hospital personnel by their professional status become fiduciaries. HCPs and hospital administrators often attain fiduciary status meaning they have a higher standard of care.

Choice restrictions

impose some restrictions on where and from whom patients can receive care. Patients can choose from physicians associated with the MCO or panel. There are closed-network or in-network (meaning in-network physician services are covered while services out-of-network are not) and open-panel or out-of-network (allowing coverage for services from physicians outside the panel).

Preferred provider organization (PPO)

is a business arrangement where insurance companies contract a group of physicians and hospitals to provide care for its beneficiaries. It is a health care delivery system. This model applies discounted fee schedules that vary the reimbursement to health care providers. Payment schemes with hospitals may include any of the payment mechanism we have discussed including DRGs or other alternative payment strategies such as bundling or discounts for services. Enrollees agree to select and utilize the specified physicians and hospitals (preferred provider panels).the PPO allows its enrollees to seek care from providers outside the network, which means there is more choice.

Joint Ventures

is a business arrangement, where separate entities agree to work together rather than compete, two or more organizations create a new organization to pursue a common purpose. Each participant and the new company remain independent.

Licensing (Licensure)

is a governmental-based process to grant permission or license to an individual or entity to perform some requested activity or deliver service based on standardized criteria demonstrating competency (usually education, experience, and examination).

Managed care

is a mechanism of providing health care services in which a single organization takes on the management of financing, insurance, delivery, and payment.

Credentialing

is a process involving a review of individual's or entity's qualifications based on organizational standard to perform some service. a third-party, usually a professional organization or granting body, to an individual's qualification, competence, or authority to perform a designated activity. It is a general that may refer to a license, certificate, or credential.

Concurrent Utilization Review

is a review of care based on its appropriateness during treatment. The most common example is monitoring inpatient stays. Discharge planning is based on concurrent review of prognosis for recovery, expected outcomes, and anticipated day of discharge.

Certification

is a voluntary process performed by a nongovernmental agency grants the individual or entity time-limited recognition to perform a designated task or deliver service after it verifies that a predetermine set standardized criteria were met.

Loss Ratio

is an insurance industry metric that is the ratio of losses to premiums earned. Losses in loss ratios include paid insurance claims and adjustment expenses. The loss ratio formula is insurance claims paid plus adjustment expenses divided by total earned premiums.

Utilization of Hospital Capacity

is based on the number of beds set up and staffed for inpatient use or capacity. Most U.S. community hospitals have fewer than 300 beds.

Justice

is being fair or equitable.

MC Influence on Cost Containment

is credited for slowing growth of health care costs during the 1990s, but the backlash against managed care prevented full cost-containment. Evidence suggests MA plans deliver higher value, but the experience is not the same with Medicaid managed care.

Beneficence

is doing good, demonstrating kindness, or showing compassion to others. To do good the actor must have knowledge of the beliefs, culture, values, and/or preferences of the individual. In healthcare, these understandings usually apply to the patient as a person. Recall that paternalism or people know best for others undermines the autonomy of the person. Some may see making good or right decisions for others as acting in the interest of the person.

Accreditation

is granted by a private entity, usually The Joint Commission (TJC).

inpatient (patient or hospital) day

is one night spent in the hospital.

MC Impact on Access

is open to debate, and it depends on the focus of debaters. MC increases access to primary care, preventive services, and health promotion, especially in geographic areas with greater HMO market share. There may be a decreased risk of preventable hospitalizations, particularly for ethnic and minority groups. Medicaid enrollees have an emergency department use, and MC may reduce their use. MC members may have trouble seeing specialists due to its access restriction mechanisms. Because of its reimbursement structures and negotiation tactics, fewer providers are accepting MCPs. Behavioral health carve-outs were instrumental in addressing long-standing challenges in access and utilization of behavioral health care.

Horizontal Integration

is organizational expansion into its existing core product or service. Geographic expansion is the main objective.

Patient days (days of care)

is the cumulative census over a given period.

average daily census

is the number of patient days within a given time divided by the number of days in the period. Occupancy rate (percentage of capacity used) is the average daily census divided by capacity × 100.

Utilization Review

is the process of evaluating the appropriateness of services. Three main types of utilization review are employed: prospective, concurrent, and retrospective.

Disease Management

is usually highly individualized and focuses on coordinating the care of high-risk patients with multiple or complex medical conditions. It is a population-based strategy focusing on chronic diseases such as diabetes.

Informed consen

legal doctrine based on ethical principles and enforced by state law.

Integration may be based on Major Participants.

physician-hospital organization (PHO) is a legal entity that represents an alliance between a hospital and local physicians, providing greater bargaining power with MCOs. ACA specified that PHOs could qualify as ACOs.

Psychiatric Hospitals

provide psychiatric and psychologic services to individuals with mental diseases and illnesses.

Autonomy

recognizes the right of the person as an individual to make his or her own decisions. The person determines what is best, regardless of whether the decision appears good or bad or right or wrong through the eyes of others. It supports an individual right to self-determination, and it also supports processes in health care such as informed consent.

Public Access

refers to governmental ownership at the federal, state, or local, such as a county, level. The governmental unit responsible is usually an "agency."

Case Management

relies on an organized approach to evaluate and coordinate care, especially in the case of complex diseases that are costly. This management style usually involves a health professional such as a NP who coordinates care using PCPs and secondary care providers as consultants.

Integrated Delivery Systems

represent organizations under ownership or contractual arrangements that provide an array of health care services. They decrease health service utilization. Lower ALOS and costs per discharge

Days of care

represent the cumulative number of patient days over a certain period (Discharges x Ave. Length of Stay).

Vertical Integration

represents a diversification strategy that links services that are at different stages in the production process of health care. The objective is to increase the comprehensiveness.

Gatekeeping

requires a primary care physician to coordinate the delivery of health to an enrollee's health care.emphasizes primary care, which includes preventive care, routine physical examinations, and primary care services.

Nonmaleficence

requires the avoidance of doing harm to others.arise in situations such as the "double effect" where acting to relieve suffering leads to harm such as death. An action known to be harmful may be justifiable where (1) the nature of the act itself is good or at least morally neutral, (2) the actor intends a good, not harmful effect, as means to achieving the good or as an end itself, and (3) good effect outweighs the bad effect and the actor uses due diligence to minimize the resulting harm (realizing this concept is controversial among philosophers and others).

Rural Hospitals

reside outside a metropolitan statistical area (MSA). The US OMB defines an MSA as an area containing at least one urbanized area with a minimum population of 50,000. It consists of a city and surrounding communities that are linked by social and economic factors. Medicare rules allow the designation of critical access hospitals (CAHs) for certain rural hospitals that operate no more than 25 beds and provide 24-hour emergency medical services. CAHs are paid according to the retrospective cost-plus method of reimbursement.

Osteopathic Hospitals

serve osteopathic physicians base their care on osteopathic principles. They take a holistic approach. As discussed in the module on HCPs, both MDs and Dos practice within the medical profession with equal privileges. Osteopathic hospitals are declining as hospitals consolidate. Hospitals tend to consolidate or close due to economic necessity.

MC Influence on Quality of Care

shows evidence MCOs improved the quality of care they deliver to their participants. They also reduced hospitalizations through increased primary and preventive care. They also tend to equalize access to and delivery of care, regardless of race, ethnicity, and socioeconomic status. Unfortunately, HMO plans experience lower enrollee satisfaction ratings than non-HMO plans. CMS quality-based star ratings for nonprofit MA plans are also higher than for-profit plans. Some of this difference may be to greater restrictions in for-profit plans. The evidence is inconsistent on whether MCPs reduce expenditures and improve access and quality of care or not.

Rehabilitation Hospitals

specialize in intensive therapeutic services to restore function.

Hospital Licensing

state-based legal and regulatory responsibility. A legal requirement to operate a hospital. Hospitals must comply with state laws, building codes, fire safety, and sanitation standards. Hospitals must also attain federal (CMS) certification to participate in federal insurance programs (Medicare and Medicaid). Must satisfy the conditions of participation (i.e., compliance with standards).

Teaching Hospitals

support medical education and provide graduate residency programs that are approved by the American Medical Association (AMA). They fulfill a substantial teaching and research mission and deliver specialized care for a variety of complex medical problems. Academic medical centers have active collaboration among a university, medical school, hospital/health system, and health care professionals.

stage 5

university-based medical centers emerged during this stage. Hospitals became complex organizations and hospital administration became a formal discipline. During this phase and stage 6, changes in financing, reimbursement, and medical technology led to hospitals promoting ambulatory care services. They also reduced their inpatient bed capacities. Believe it or not, these shift to outpatient care create problems for care of diseases requiring inpatient care, such as COVID-19 (See below).