HOSPITALS TODAYOF ACUTE CARE HOSPITALSAcute care is a level of health - PDF document

1 HOSPITALS TODAYOF ACUTE CARE HOSPITALSAc
HOSPITALS TODAYOF ACUTE CARE HOSPITALSAcute care is a level of health care inwhich a patient is treated for a brief butsevere episode of illness,for conditionsthat are the result of disease or trauma,and during recovery from surgery.Acutecare is generally provided in a hospital by a variety of clinical personnel usingtechnical equipment,pharmaceuticals,and medical supplies.According toConnecticut public health code that regulates hospitals,an acute care hospitalis defined as a short-term hospital thathas facilities,medical staff and all necessary personnel to provide diagnosis,care and treatment of a wide range ofacute conditions,including injuries.There are thirty-one acute care hospitalsin Connecticut,including one short-termchildrenÕs hospital.In addition to acutecare hospitals,there are several other typesof hospitals including chronic disease,hospice,and hospitals for persons with Exhibit 1: Hospitals by Bed Size Categories*Connecticut Northeast United StatesBeds/Facility #Hospitals %Hospitals #Hospitals %Hospitals #Hospitals %Hospitals00-99 10 30% 91 44% 2278 45%100-19911 33% 62 30% 1304 26%200-2997 21% 28 14% 644 13%300-3991 3% 11 5% 352 7%400-4991 3% 3 1% 183 4% 500+3 9% 12 6% 254 5%Total33 99% 207 100% 5015 100%*This edition used data from 1997,when Connecticut had 33 acute care hospitals.Source: Hospitals can be classified as urban orrural.According to American HospitalAssociation (AHA) definitions,Connecticut has few rural hospitals compared to the rest of the Northeastand the nation.The AHA also classifies hospitals accordingto ownership.All of ConnecticutÕs acutecare hospitals are not-for-profit.(However,at the writing of this report,the Office ofHealth Care Access expects to receive aCertificate of Need application requestingconversion of a not-for-profit hospital tofor-profit status.) This compares to the restof the country,in which approximately sixin ten hospitals are operated as not-for-profit entities.An acute care hospital requires a licensefrom the State Department of PublicHealth (DPH).DPH statutes and regula-tions speci

2 fy licensing requirements.According to D
fy licensing requirements.According to DPH regulations 10-13-D1,Connecticut acute care hospitals mustprovide the following:Departments ofMedicine,Radiology and Pathology;aclinical laboratory;blood bank;operatingroom,if surgery is performed;pharmacy;dietary service;and emergency room.The service provision requirements for ashort term childrenÕs hospital,accordingto DPH regulations 10-13-D4a,are similarto those for a regular acute care hospitalwith the additional need to have aDepartment of Pediatrics;it is not necessaryfor childrenÕs hospitals to have aDepartment of Medicine,a blood bank,or an emergency room.For purposes ofthis report,the Connecticut ChildrenÕsMedical Center is included as one of thestateÕs thirty-one acute care hospitals.Public health regulations also establishminimum standards in the following areas:physical plant;staffing patterns;quality ofcare;ancillary services (dietary,pharmacy,and therapies);specialty services (emer-gency room,ICU/CCU,maternity);qualityassurance;and infectious disease standardsand controls.By law,Connecticut hospitals are requiredto provide care to stabilize a patient incase of emergency,regardless of ability topay.These hospitals must also treatpatients whose care is reimbursed byMedicaid and Medicare.ORGANIZATIONAL STRUCTURE OF HOSPITALSAND CORPORATE RELATIONSHIPSThe complexity of hospitalsÕorganizationalstructure has grown with the increasedcomplexities in the health care deliverysystem.Today,most hospitals have aninternal personnel structure that consistsof a board of directors or trustees,anexecutive management team,operationsmanagement,clinical staff including nursing and technical personnel,andadministrative support staff.While somehospitals employ a limited number ofphysicians,most physicians working in ahospital are not employees of the hospital.Instead,they are granted privileges toadmit patients to the hospital.This statusprovides physicians with considerableinfluence over hospital operations as theyare one of two primary means by whichpatients flow into hospitals.employees report through managers tothe hospitalÕs executive team,which typi-cally includes a chief executive officer,a18 Exhibit 2: Hospital Location*Connecticut Northeast United States#Hospitals %Hospitals #Hospitals %Hospitals #Hospitals %HospitalsUrban 27 82% 130

3 63% 2816 56%Rural
63% 2816 56%Rural6 18% 77 37% 2199 44%Total33 100% 207 100% 5015 100%*This edition used data from 1997,when Connecticut had 33 acute care hospitals.Source: medical director,and vice presidentsresponsible for various clinical andadministrative areas.The board of direc-tors typically oversees strategic decisionsfor hospital organization and operation,has the power to approve or disapproveexpenditures and plans,and is ultimatelyresponsible for the hospitalÕs services.During the 1990s ConnecticutÕs hospitalschanged in both structure and the servic-es they offered.Hospitals experiencedvertical integration (an expansion in theirrange of services beyond acute care) andhorizontal integration (mergers and affili-ations between themselves and otherhealth care institutions).Hospitals pur-sued integration strategies in order to increase their range of markets and toexpand their geographic service areas.Many hospitals also became part of cor-porations that own different types ofproviders along a continuum of care.These corporations also frequently ownother holdings,such as real estate andother entities which might be for-profit.The corporate health system organizationchart depicted above is a model used bynearly all acute care hospitals inBased on a review of FY99 corporatestructures and affiliations provided to theOffice of Health Care Access in the annualhospital financial filing,the followingstatement can be made about the variousentities within corporate systems:Almost all corporate structures have a separate entity for foundations,auxiliary or fundraising.Most corporate structures have home health,real estate,and for-profit Many corporate structures have management services,billing and collection services,rehabilitation,physical therapy,pharmacy,laboratory,radiology,long term care,outpatient clinics,surgery centers,physician hospital organizations,and community health or education Some corporate structures have behavioral health and hospice ROLE OF HOSPITALS IN THE COMMUNITY AND AS EMPLOYERSConnecticutÕs acute care hospitals have aconsiderable economic influence upontheir communities and the state throughtheir role as employers and purchasers.An assessment of their economic impactmust also include factors that are not easily

4 quantifiable.These include theircontribu
quantifiable.These include theircontributions to community developmentand the largely free preventive care and19 & VNAFor-profit EntityReal EstateFundraising CORPORATION(Parent) BehavioralManagementServices,Billing, CollectionOutpatient& SurgeryPharmacy,Radiology,LaboratoryLong-term Care,Rehab,Physical Therapy Insurance health education programs that fostercommunity wellness.Hospitals originated as charity institutionsand still provide a significant amount ofdiscounted and free care.By law,noacute care hospital in Connecticut candeny emergency treatment based upon apatientÕs ability to pay.From January 1998through June 1999,hospitals providedover $352 million in uncompensated carethat included free or discounted servicesand uncollected bad debts.In addition touncompensated care,ConnecticutÕs hos-pitals provide numerous health educationprograms,preventive care services,andsupport groups for free or a nominal fee.For instance,hospitals within Connecticutoffer such diverse courses as child care,senior healthy living,and even Tai-chi andyoga.Some hospitals provide particularemphasis on community wellness andpreventive medicine programs.In someareas,mobile care units are dispatched tothe community to provide health screen-ings and information.Still others providehealth and safety programs in local schoolsand provide students with an interest inhealth care careers with an opportunityto serve internships.While providing health care services isthe most visible aspect of ConnecticutÕsacute care hospitalsÕinfluence upon theircommunities,they also have profoundand multifaceted economic effects aspurchasers.For instance,in FY 1998,ConnecticutÕs acute care hospitals purchased over $409 million of productsand services.In addition to their role as purchasers,hospitals and the health care industry ingeneral are significant employers withinthe state,employing nearly 160,000 people with total annual wages of $5.7During the recession of the late1980s and early 1990s,health services wasone of the few vibrant sectors of theeconomy.Its workforce grew an averageof 3.5% annually.Although its rate ofexpansion has slowed over the latter halfof the decade,the health service industryemploys nearly one of every tenConnecticut workers.Hospitals employ oneof every three health care professionalsand are generally among their communi-tiesÕlargest employe

5 rs.Statewide,theyemployed more than 54,0
rs.Statewide,theyemployed more than 54,000 people andpaid over $2.5 billion in salaries,wages,fringe benefits,and professional fees in20 There are thirty-one acute care hospitalsin Connecticut,including one acute carechildrenÕs hospital.Most of the stateÕs hos-pitals have fewer than 200 licensed beds.These hospitals are all non-profit hospitals,although there is a pending Certificate ofNeed application to convert one hospitalto a for-profit status.Most hospitals in thestate are considered urban hospitals.Hospitals have played an integral role inthe evolving health care delivery systemand within their communities.In additionto providing critical health care servicesand community wellness programs,hospitals contribute to the stateÕs economythrough their roles as purchasers andemployers.Although hospitals frequentlyhave been considered the center ofpatient care,the health care delivery system continues to evolve rapidly,forcingchange at every level.Hospitals haveevolved in part through vertical and horizontal integration strategies and bybecoming part of parent corporationsthat have a variety of entities.OVERVIEW OF CHAPTERS AND TOPICSHospitals,like other health care providers,are challenged by forces of change andmust either learn to adapt or enact counter-balancing forces.In the planning phaseof this study,Connecticut hospital execu-tives were asked to identify forces thatcurrently have a major impact on hospi-tals.Through the course of this study,these topic areas emerged as forces thathave a significant effect on hospital per-formance.The remainder of this sectionprovides an introduction and overview toeach of the seven topic areas by present-ing each topic as a separate chapter.Each chapter concludes with a set of recommendations related to the topicproposed by the participants of a summer2000 focus group assembled to discussthe topic.Many of these seven forceshave an effect on the others;it is oftenimpossible to discuss one force withoutmentioning the others.Consequently,information that is needed to provide the reader with overall context may berepeated across more than one chapter.Competition and Integrated Deliverydescribes how the health careenvironment has transformed from stand-alone providers into integrated deliverysystems.The chapter describes the primary drivers behind this transforma-tion and the two types of

6 integrationÑhorizontal and verticalÑin
integrationÑhorizontal and verticalÑin more detail,using specific examples fromConnecticutÕs hospitals.Health Care Payment Mechanismspro-vides an overview of the different meansby which hospitals are paid for servicesand how changes in these mechanismshave affected hospitals.This chapter alsodiscusses other types of revenue sourcesfor hospitals.TheRegulatory Environmentchapterprovides an overview of the hospital regulatory environment,including adescription of the primary state and federal regulatory bodies.Three areas ofstate regulation identified by focus groupparticipants as having the greatest impactare discussed in more detail:Certificateof Need,Licensing,and Data Collection.TheNursing Workforcechapter describesthe composition of ConnecticutÕs nursingworkforce,analyzes the evolution,causesand consequences of the nursing short-age,and suggests what can be done toalleviate some of the problems. Information Technology and HIPAAdescribes how the use of informationtechnology has evolved as a tool forhealth system transformation and thechallenges associated with this change.The chapter also describes pertinentaspects of the Health Insurance Portabilityand Accountability Act (HIPAA) and theeffect of complying with HIPAA mandates.The Medical Technologychapter provides an overview of technologies thathave the greatest impact on hospitals andthe challenges associated with choosing,assessing,financing,and getting reim-bursed for these technologies.presents an overview of theorigins and evolution of the consumermovement and the major forces drivingthis movement.The chapter also discussesthe impact consumerism has on providersand how providers have responded,further changing the delivery system. Guide to Hospital PerformanceIn a city or town with two or more hospitals,the operation by one hospital of a twenty-four hour emergency room may be considered satisfactory compliance with this section.In other hospitals,arrangements may be made to operate an emergency room twenty-four hours a day with a physician to be available onsite within twenty minutes of the call to the physician.The other primary method of patient inflow to hospitals is the emergency room/department.Connecticut Department of Labor.Connecticut Department of Economic and Community Development.Connecticut Department of Labor and Office of Health Care Access Annual Report