Advantages And Disadvantages Of Stand Alone Hospitals

Health care is something that everyone requires in order to lead a healthy life. After a visit to a hospital there are instances when certain individuals require further care due to their circumstances. Although hospitals may provide long-term care, it is not usually ideal. Hospitals are in place to handle emergency situations and aid in stabilizing the patients. Once the patients are stable, they must be transitioned to another facility if they require further assistance. This will avoid maximum occupancy for the hospital and allow it to remain available to other patients that may need their services. Patients who require long-term care or around the clock care and are in good medical condition should seek a long-term care facility, such as a skilled nursing facility or nursing home. For some individuals, facilities such as skilled nursing facilities or nursing homes are a blessing. These types of facilities are in existence to aid in the recovery of certain injuries and or to provide living arrangements for those who lack someone to care for them or assist with meeting their health care needs.

For the last five weeks research has been done on Kaiser Permanente, an organization that contains Kaiser Foundation Health Plan, Kaiser Foundation Hospitals and Permanente Medical Groups in eight regions. Since its inception in 1945, Kaiser Permanente has become the largest not-for-profit, integrated health care delivery system in the United States, serving 8.6 million members in eight regions: Northern and Southern California, Colorado, Georgia, Hawaii, the Mid-Atlantic States, Ohio, and the Northwest. About three quarters of the members are in California, the organization’s birthplace. It is the largest nonprofit integrated health care delivery system in the United States. Its mission is to provide affordable, high-quality health care services to improve the health of their members and the communities they serve. For the purpose of this research, focus will be on Northern California in a randomly selected hospital.

The reimbursement method used at St. Anthony’s hospital is quite distinct depending on the party doing the payments. Payments are received from Medicare, Medicaid, private insurers and also directly from patients. The party responsible for Medicare payment is the Federal government and it offers payment mainly for the elderly. With the Medicare payment, hospitals receive a flat fee depending on the case. According to Gee (2006), most hospital revenue has declined because of the revised payment set by the Diagnosis-Related Groupings. The fee for most cases varies according to the Diagnosis-Related Group (DRG) it can be classified under. For example, Medicare pays only a fixed amount for an elderly patient suffering from pneumonia regardless

Since 1984, Medicare patients have been serviced under the prospective payment system of the Medicare program. Under this system, primary care providers are reimbursed for their services using a fixed payment for each patient that is determined by the patient’s diagnosis-related group at the time of the admission. Therefore, under the prospective payment system a hospital’s reimbursement is unaffected by the actual expenditures that are required to care for a patient.

The United States has a significant “delivery of care” issue wherein physicians (and other HCPs) are concentrated in and around major cities and densely populated areas. This leaves rural populations with fewer physicians and more difficult access to care.

One of the trends that is consistent between Pennsylvania and Kentucky is the discrepancy between physicians available in rural areas versus urban areas. For example, in Pennsylvania in 2012 for every 100,000 persons in an urban area of the state there was 273 physicians available. While in the rural areas per every 100,000 in population there was only 150 physicians. (2012 Pulse of Pennsylvania’s Physician and Physician Assistant Workforce, 2014). The reason behind this trend is simple, the larger the area the greater the financial opportunities. Also urban areas tend to have larger hospital facilities that provide access to well-equipped facilities, with lab services, radiology departments, staffed surgical suites, new medical devices to assist in surgery such as laser and robotics, and updated imaging devices. (Johnson and Cooper, 1982). These statistics highlight the need to institute methods that will attract providers to the rural areas. Whether this is through scholarship programs for those who intend to work in a rural area upon graduation, accepting federal funds to expand rural hospitals and improve technology, accepting federal funds to expand Medicaid programs, or a combination of all three providers need incentive to move into the rural areas. The standard of care needs to be consistent across the state no matter what area a patient lives in.

“The Tax Equity and Fiscal Responsibility Act (TEFRA), signed into law September 3, 1982, mandated the development of a prospective payment methodology for Medicare reimbursement to hospitals.” http://sunlightfoundation.com/blog/2009/09/08/slug/. It changed Medicare reimbursement from a fee for service to prospective payment system. Which is where there`s a reimbursement method where`s there an amount of payment determined in advance of services being performed. The rates are done annually. Reimbursements for inpatient care by a classification scheme called diagnosis-related groups. If the patient might have to stay longer in inpatient care more than average days, the hospital may lose money on that patient.

The Inpatient Prospective Payment System is based on CMS (Medicare) standards because it is the largest reimburser. It was created to control rising healthcare costs by determining reimbursement prospectively. The costs of inpatient acute hospitals stays under Medicare Part A are fixed so that each patient case aligns with a Diagnosis Related Group (DRG).

What is the control mechanism the government uses on Medicare payments to physicians, and how is it applied?

Another threat is the current state of rural hospitals nationwide. According to the case study, about 25% of Americans live in rural areas and only about 10% of physicians actually practice in rural areas. There is a 15% gap in the ratio of rural citizens to available practicing physicians. This is a threat to ELH’s need to attract and hire more physicians. In relation to rural hospitals, citizens have longer drive times to their medical facilities. This causes them to delay routine visits which subsequently exacerbates

In the first model, the episode of care is the length of time the inpatient stays in the acute care hospital. Medicare pays the hospital a discounted payment based on the payment rates established under the Inpatient Prospective Payment System (IPPS), which starts at zero percent for the first six months and then rises to a minimum of two percent in the third year, based on the IPPS. Physicians are paid under the Medicare Physician Fee Schedule. Hospitals and physicians are to share in any costs. This model benefits Medicare patients by reducing their costs, but not hospitals and physicians because they must share in any expenditures. The second model, which is also based on IPPS, is different from the first model because it includes inpatient and post-acute care from either 30 or 90 days following discharge. This bundled payment includes physicians’

Fee for service, as the name suggest is a method in which the healthcare provider is paid individually for each and every service provided. In this method the numbers of services determine the amount of reimbursement. This is where the healthcare providers misuse their authority and either provides more services than what is needed or just manipulate the number of services provided. There are specific

The Outpatient Prospective Payment System pays for services that are designated as outpatient hospital services, partial hospitalization services, hepatitis B vaccines and their administration, casts, splints, and initial preventative physical exams that are received within the first 12 months of the Medicare Part B coverage becoming effective. Other services that are included are x-rays, stitches, hospital charges for an emergency room visit, surgeries that are done on an outpatient basis, observation services due to an illness or injury and the administration of certain drugs that you cannot give

In 1998, CMS implemented a prospective payment system (PPS) for Medicare SNFs, replacing the prior fee-for-service reimbursement system.Under PPS, the Medicare program pays SNFs per day rates, which cover all routine services, ancillary services, and capital-related costs for a beneficiary's Part A stay. The program pays different rates for residents according to case-mix adjustments, which are based on residents' assessments (looking at the severity of residents' medical conditions and skilled care needs). The payment categories are called Resource Utilization Groups, or RUGs. Medicare pays

With PPS Medicare has developed diagnosis-related groups (DRGs) that groups clinical conditions together and based off the DRGs of a patient it then in turn provides a reimbursement rate to give the provider (https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/acutepaymtsysfctsht.pdf). The theory behind this style of reimbursement is that it give the hospital an incentive to efficiently treat a patient and quickly discharge the patient without wasting any unnecessary medical resources.