Essay about Lakeside Hospital Case

1244 Words May 8th, 2014 5 Pages
Lakeside Hospital
A hospital just can’t afford to operate a department at 50 percent capacity. If we average 20 dialysis pa- tients, it costs us $425 per treatment, and we’re only paid $250. If a department can’t cover its costs, includ- ing a fair share of overhead, it isn’t self-sufficient and I don’t think we should carry it.

Peter Lawrence, M.D., Director of Specialty Services at Lakeside Hospital, was addressing James Newell, M.D., Chief Nephrologist of Lakeside’s Renal Division, concerning a change in Medicare’s payment policies for hemodialysis treatments. Recently, Medicare had begun paying independent dialysis clinics for standard dialysis treatments, and the change in policy had caused patient volume in Lakeside’s dialysis
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Used three times a week for 4 to 5 hours, the kidney machine allows people with chronic kidney disease to lead almost normal lives. The dialysis unit had 14 artificial kidney machines. Because of space limitations, they used only 10 at any one time, reserving the other four for breakdowns and emergencies. Open six days a week with two shifts of patients daily, the unit could provide 120 treatments a week, which meant they could accommodate 40 regular patients. From 1973, the year that Medicare began reimbursing for dialysis, all dialysis patients at Lake- side had been covered by Medicare. Until recently, the unit had operated at almost 100 percent capacity, even extending its hours to accept emergency cases and to avoid turning away patients. Patients typically spent their first three months of dialysis in a hospital facility. If there were no complications when this “startup” period had passed, they were then required to transfer to an independent center. Most independent dialysis centers were centrally owned and operated, and were organized into satellite groups spread throughout urban and suburban areas. The facilities were modern and attrac- tively designed and, because they were separate from hospitals’ institutional environments, they of- fered psychological advantages to patients. Centrally managed with low overhead, they could achieve

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