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
1975
1990
2000
2010
Change
All Hospitals
7,156
6,649
5,810
5,754
-20%
Federal
382
337
245
213
-44%
Private Nonprofit
3,339
3,191
3,003
2,904
-13%
For Profit
775
749
1,013
31%
State-Local Govt
1,761
1,444
1,163
1,068
-39%

10. Hospital Beds by Type By year (in 1,000)
1975
1990
2000
2010
Change
All Hospitals
1,466
1,213
983
942
-36%
Federal
132 98 53 45
-66%
Private Nonprofit
658
657
583
556
-16%
For Profit 73
101
110
125
71%
State-Local Govt
210
169
131
-40%

11. Occupancy 1975 1990 2000 2010 All Hospitals 76.7 69.5 66.1 66.6
Federal
80.7
72.9
68.2
65.3
Private Nonprofit
77.5
69.3
65.5
66.2
For Profit
65.9
52.8
55.9
57.1
State-Local Govt
70.4
63.2
64.4

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