Bethel College Total Rewards Compensation & Benefits Discussion

The discussion requires a minimum of 300 words, 3 scholarly sources, including the textbook. Make sure that you use APA style with your references. Under no circumstances use any direct quotes. Any directly quoted or copied material will result in a zero for the assignment. Let’s be sure to write it in own work 100% and give appropriately when using someone’s else work.

Reference for textbook attached:

Williams, S. J., & Torrens, P. R. (2008). Introduction to health services (7th ed.). Clifton Park, NY: Thomson Delmar Learning.

Compare and contrast horizontal and vertical integration of health care organizations (hospitals and health systems). Why would one type of integration be preferred over the other? In your response, please consider the major trends that have occurred in this segment of health care over the last 5-10 years.

1,500 word count and there is a total of 6 questions each (not including in-text citation and references as the word count), a minimum of 4 scholarly sources are required in APA format. For the 4 scholarly sources, one from the textbook that’s posted below and the other two from an outside source . Let’s be sure to write it in own work 100% and give appropriately when using someone’s else work. Under no circumstances use any direct quotes. Any directly quoted or copied material will result in a zero for the assignment.

Reference for textbook attached:Williams, S. J., & Torrens, P. R. (2008). Introduction to health services (7th ed.). Clifton Park, NY: Thomson Delmar Learning.

Knowledge: What are the key things to “know” about each of the 3 systems discussed? Why are they “key” issues?

Comprehension: What is your understanding of why there are three different / separate models?

Application: Give an example of one of the three systems as to how it works in real life. A personal story of yours / someone you know or a case study from the research or an example from your work.

Analysis: From the example you gave what are the pros and cons of the experience? What casued the events you describe to happen?

Synthesis: Offer a new and unique idea of yours or from the research as to how the example you gave could have been handled better. What could have been improved? Your own new idea or a known best practice.

Evaluation: Why would your idea be better / same / worse than what happened in your example? Has your idea been tried / practiced before? How did it work out? Or why hasn’t it been tried? Obstacles?

CHAPTER 8
Hospitals and Health Systems
Stephen J. Williams and Paul R. Torrens
CHAPTER TOPICS
History of the Hospital
The Scope of the Industry
R
I
C
A
R
D
,
LEARNING OBJECTIVES
Upon completing this chapter, the reader
should be able to
1. Understand the role of the hospital in
today’s health care system.
Structure of Hospitals and Health Systems
Hospital Organization
The Hospital and Medical Staff
Key Issues Facing the Hospital Industry
A
D
R
I
E
N
N
E
2. Appreciate the historical trends that have
shaped the hospital industry.
3. Understand the types of hospitals,
ownership patterns, and differentiating
characteristics of various hospitals.
4. Comprehend the development of health
systems and the role of hospitals in such
systems.
5. Follow the impact of competitive pressures
and other developments on the structure
and operation of hospitals and health
systems.
6. Understand the internal organizational
structure of hospitals.
1
9
0
2
T
S
182
Copyright 2008 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
CHAPTER 8 Hospitals and Health Systems
The hospital’s role in the nation’s health care system has changed dramatically over the years. The
hospital originated as an institution for the poor, offering little in the way of therapy, and then evolved
into the center of the system and the primary technology focus of health care. Now the hospital is a
provider of highly specialized services and the hub
of an assortment of other activities. The traditional
independence of each hospital has been dramatically altered by horizontal and vertical integration
within the health care system such that today few
R technolhospitals are truly freestanding entities. The
ogy to manage hospitals has likewise changed
with
I
an information systems focus and the application of
C
complex parameters of performance measurement.
Aand payExpectations of consumers, providers,
ers have also changed dramatically over the years
R
with the anticipation of more effective interventions
at more efficient and competitive pricing.DFinally, as
has always been the case in the past, the hospital
in,
dustry continues to face immense challenges, opportunities, and expectations for the future.
The hospital has also changed fromAan island
of care to an institutional octopus, with tentacles
D affiliatspringing out throughout the community,
ing with other institutions and providers,
R and providing outreach services for consumers. On the
inpatient side, hospitals are increasinglyI providing
the most complex of care to the most critically
ill
E
patients. On the outpatient side, most hospitals are
N
broadening the array of services that they offer to
better compete.
N
Hospitals face the challenges of sick and dying
E
patients, demanding payers, government officials
seeking accountability, physicians demanding the
availability of the latest equipment and
1 support,
and many other crosscurrents. Some hospitals are
9
for-profit entities, while others are not-for-profit.
Some hospitals are highly specialized while
0 others
offer a broad range of services. Hospitals are often
major employers in their communities 2and many
provide the bulk of indigent care for low-income
T
and disenfranchised citizens. Through it all, the
S
backbone of hospital management has increasingly
adopted the managerial principles of commercial
183
industry, seeking to provide services in an efficient,
but cost-effective manner, and to offer competitive
pricing to third-party and governmental payers. The
challenges of this industry are immense and unlikely to recede in the decades that follow.
HISTORY OF THE HOSPITAL
Although the hospital today is in the forefront of
technology and clinical medicine, the history of the
nation’s hospitals actually began as facilities for
housing the poor and the ill. These institutional
warehouses for human suffering were the almshouses, the pest houses, the poor houses, and the
workhouses that sheltered the homeless, the poor,
the mentally ill, those with serious degenerative diseases, and others for whom there was little to offer
in the era before modern medicine. Isolation of individuals during epidemics of cholera and typhoid,
among other diseases, also led to the utilization of
these institutions. Little medical knowledge was
available and few individuals received any significant treatment.
The middle class avoided these institutions and
received their care at home. Not until the 1700s
and 1800s did hospitals emerge with a mission of
providing some form of clinical medical care. Many
of these early hospitals were supported by philanthropic efforts and religious organizations. Also
during this period, many public hospitals were established in various cities to provide for the social
needs of local populations, laying the groundwork
for our modern acceptance of local government as
the provider of last resort.
Finally, by the early 1900s, with the introduction
of scientific method in medical practice and the
recognition that hospitals and clinical medicine
must adhere to a stricter formulation of practice focused on scientific discovery, was the era of the
truly modern hospital established.
Throughout the twentieth century, the escalating
advance of knowledge accelerated the focus of the
Copyright 2008 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
184
hospital as a center for medical technology. After
World War II, the hospital’s role as a center of technology and innovation became firmly established.
At this point, the practice of medicine itself was increasingly dependent on scientifically valid knowledge and training. Finally, over the past 30 years
the degree of rigor of clinical practice and the scope
of scientific knowledge has escalated greatly, and
the hospital has become a center of high standards,
scientific applications, and advanced technological
capability.
At the same time, the increasing shift of servicesR
to
an ambulatory care arena facilitated by technological
I
advancement itself has left the hospital with an everC
more complex base of patient care, higher acuity,
A
and higher costs. In addition, pressure from payers,
as noted previously, has escalated greatly as has the
R
expectation of providers and consumers alike. IndusD
try consolidation, vertical and horizontal integration, public policy concerns, and quality assessment
,
and assurance have placed the operation of the nation’s hospitals under tremendous scrutiny. Yet,
through it all, the nation’s hospitals have risen to the
A
challenge of providing superlative care overall in a
D
high-intensity, stressful atmosphere that has significantly contributed to our improved health status and
R
well-being. This is a remarkable achievement in light
I
of countervailing financial and political pressures
that have always buffeted the hospital industry. We
E
owe a great debt of gratitude to the nation’s hospitals
N
and to those dedicated individuals who work within
these institutional walls for achieving so much in N
an
environment that started as a warehouse for the poor
E
and sick, left to die without care and concern.
1
9
THE SCOPE OF THE
0
INDUSTRY
2
Although the hospital industry has seen its share
T
of the nation’s health care dollar decline someS
what, hospital systems are still immense segments
of the industry and of our nation’s economy. (See
Table 8.1.)
PART THREE Providers of Health Services
Table 8.1. Hospital Expenditures by Source of
Funds: United States, Selected Years
Source of Funds
Hospital care expenditures
All sources of funds
Out-of-pocket payments
Private health insurance
Other private funds
Government
Medicaid
Medicare
1960
1990
2003
Amount in billions
$9.2 $253.9 $515.9
Percent Distribution
100.0
100.0
100.0
20.8
4.4
3.2
35.8
38.3
34.4
1.2
4.1
4.1
42.2
53.2
58.3
—
10.9
16.9
—
26.7
30.3
In 2003, the hospital industry alone accounted
for more than $500 billion of expenditures. In 1960,
the industry counted for only $9.2 billion of economic activity annually.
The growth of private health insurance and government entitlement programs, particularly Medicare, has shifted the burden of paying for hospital
care to third parties. In 1960, more than 20 percent
of the hospital bill was paid by people out of their
own pockets; by 2003, this percentage had
dropped to 3.2 percent. Private health insurance
now accounts for a little more than one-third of all
hospital expenditures while government programs
account for nearly 60 percent. Medicare alone
counts for nearly a third of all hospital expenditures; in many facilities the Medicare program pays
about half the bill overall. Certainly, for the nation’s
seniors, Medicare is a critical source of support for
paying for the enormous costs of hospitalization.
The number of hospitals in the United States has
decreased dramatically. Table 8.2 illustrates this decline with the total number of hospital in 1975 at
7,156 dropping by 2003 to 5,764. A small number
of the nation’s hospitals are owned and operated
by the federal government. These include the Veteran’s Administration Hospitals and military facilities. The vast majority of hospitals are nonfederal
and are nonprofit, for-profit, or owned by state and
local governments. The information in this table
Copyright 2008 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
CHAPTER 8 Hospitals and Health Systems
185
Table 8.2. Hospital and Beds by Ownership and Hospital Size: United States, Selected Years
Type of Ownership and Size of Hospital
Hospitals
All hospitals
Federal
Nonfederal
Community
Nonprofit
For profit
State-local government
Bed size
6–24 beds
25–49 beds
50–99 beds
100–199 beds
200–299 beds
300–399 beds
400–499 beds
500 beds or more
R
I
C
A
R
D
,
A
Dbe noted
reflects hospital ownership, and it should
that some hospitals, while owned by one
R type of
entity, may be operated under contract by another
entity, such as a hospital managementI company.
The largest grouping of hospitals in E
the nation
are nonprofit community hospitals. Although their
N
numbers have declined overall, they remain the primary source of hospital care for most Americans.
N
These hospitals are owned by nonprofit entities,
E
although they are sometimes operated under contract by for-profit or other nonprofit corporations
that specialize in managing hospitals and
1 health
systems.
9 function
Nonprofit entities, including hospitals,
under special provisions of corporation law
0 in each
state, and under federal and state tax provisions that
2 The narecognize their community service function.
tion has approximately 1 million nonprofit
T entities
of various sorts and hospitals have long been a traditional service provider in the nonprofitSsector.
Nonprofit entities serve a community service
and have special recognition under the law due to
1975
1995
2003
7,156
382
6,774
5,875
3,339
775
1,761
Number
6,291
299
5,992
5,194
3,092
752
1,350
5,764
239
5,525
4,895
2,984
790
1,121
299
1,155
1,481
1,363
678
378
230
291
278
922
1,139
1,324
718
354
195
264
327
965
1,031
1,168
624
349
172
256
their role in our society. Nonprofit entities do not
have owners and are governed by a communitybased board that has ultimate authority for operation of the entity. Nonprofit entities are generally
exempt from most taxes at the federal, state, and
local levels including income and property taxes.
Many nonprofit entities have tax exempt status
under Section 501C(3) of the federal tax code, allowing individuals to make potentially tax deductible
donations to these organizations. Nonprofit entities are able to raise funds through donations, retained earnings, and debt obligations, often on favorable terms.
Nonprofit entities may be “sponsored” by various types of organizations. Many hospitals have
traditions of religious sponsorship. However, they
are not owned by such sponsors. Nonprofit entities
may also affiliate with each other through various
organizational arrangements. Most nonprofit hospitals operate in a manner similar to other types of
hospitals by employing modern management techniques, sophisticated information systems, and other
Copyright 2008 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
186
principles of twenty-first-century management. Nonprofit entities are generally expected to provide some
indigent care and serve the community in a variety
of ways as well.
A much smaller percentage of the nation’s hospitals are operated as for-profit businesses. Forprofit entities have owners and issue stock to those
owners to reflect their equity position. For-profit entities, including hospitals, may be publicly or privately held. Publicly held for-profit entities have
stock that is available for purchase by anyone, typiR
cally through the nation’s various stock exchanges.
A variety of accountability and registration rules
I
and regulations affect publicly owned for-profit
C
entities, generally administered by the Securities
A
and Exchange Commission at the federal level and
similar entities at the state level. Privately held
R
for-profit entities also issue stock, but that stock is
D
not available to the general public for purchase.
Accountability and other regulatory oversight are
,
much less for privately held entities.
For-profit hospitals may be independent and historically in this country and throughout the world
A
today many for-profit hospitals have been owned
D
by the physicians who practiced in them. Today,
however, due to the tremendous capital costs R
of
building, maintaining, and operating a hospital,
I
most hospitals in the United States that are for
profit are part of large multihospital chains, mostE
of
which are publicly traded. For-profit hospitals are
N
not just accountable to the community but must
also provide a return on investment to the shareN
holders; therefore they expect to generate a profit
E
to pay a return to the equity investors for their capital. For-profit hospital companies may also manage not-for-profit and governmental hospitals as1a
separate line of business.
The third category of ownership in Table 8.29is
state and local government hospitals. These are
0
hospitals that are owned by state or local govern2
ments, but again, may be managed under contract
by other entities, either for-profit or not-for-profit
T
management companies. Many local government
S
hospitals are owned by counties or other local government units. They are often the providers of last
PART THREE Providers of Health Services
resort, bearing the burden of indigent care in their
communities.
In the western United States, hospital districts
were created much like water districts to provide infrastructure for communities as populations moved
West. These local taxing districts were responsible
for the construction and operation of hospitals for
their communities. In recent years the taxing authority of these districts has accounted for a very
small percentage of total hospital operational costs.
As reflected in Table 8.2, the majority of the
nation’s hospitals are relatively modest in size as
measured by licensed hospital beds. The very large
institutions are typically teaching hospitals, often
associated with medical schools, and have a range
of residency programs for postgraduate medical education. The small hospitals are typically in rural
areas, raising particularly complex issues regarding
financial viability.
Broadly speaking, large hospitals are more
prevalent in the East as the trend over time has
been to build smaller rather than larger facilities.
Significant numbers of smaller hospitals, particularly in urban areas, have closed over the past 25
years due to financial and competitive pressures,
and to the difficulty of efficiently operating a small
number of hospital beds. Specifying the optimal
side of a hospital is particularly difficult given the
complexity of services now offered on an inpatient
basis. Most likely, the very small and very large hospitals are the least efficient.
As reflected in Table 8.3, the total number of
hospital beds has dropped from just under 1.5 million to just less than 1 million since 1975. This
trend reflects a combination of closures and reductions in operating licensed beds among those hospitals still in operation. Large hospitals, because of
their size, account for a disproportionate share of
the total number of hospital beds. About 70 percent of the nation’s hospital beds are in nonprofit
facilities.
As reflected in Table 8.4, there are approximately
36 million admissions to the nation’s hospitals every
year, of which 25 million are to nonprofit hospitals.
The number of admissions has been remarkably
Copyright 2008 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
CHAPTER 8 Hospitals and Health Systems
187
Table 8.3. Hospital Beds by Ownership and Hospital Size: United States, Selected Years
Type of Ownership and Size of Hospital
Beds by Ownership
All hospitals
Federal
Nonfederal
Community
Nonprofit
For profit
State-local government
Bed size
6–24 beds
25–49 beds
50–99 beds
100–199 beds
200–299 beds
300–399 beds
400–499 beds
500 beds or more
R
I
C
A
R
D
,
1975
1995
2003
1,465,828
131,946
1,333,882
941,844
658,195
73,495
210,154
Number
1,080,601
77,079
1,003,522
872,736
609,729
105,737
157,270
965,256
47,456
917,800
813,307
574,587
109,671
129,049
5,615
41,783
106,776
192,438
164,405
127,728
101,278
201,821
5,085
34,352
82,024
187,381
175,240
121,136
86,459
181,059
5,635
33,613
74,025
167,451
152,487
119,903
76,333
183,860
A
Table 8.4. Hospital Admissions by D
Ownership and Hospital Size: United States, Selected Years
R
Type of Ownership and Size of Hospital
1975
1995
I
Beds by Ownership
Number in thousands
E
36,157
33,282
All hospitals
N
Federal
1,913
1,559
Nonfederal
34,243
31,723
N
Community
33,435
30,945
E
Nonprofit
23,722
22,557
For profit
State-local government
By hospital bed size
6–24 beds
25–49 beds
50–99 beds
100–199 beds
200–299 beds
300–399 beds
400–499 beds
500 beds or more
1
9
0
2
T
S
2003
2,646
7,067
3,428
4,961
36,611
973
35,637
34,783
25,668
4,481
4,634
174
1,431
3,675
7,017
6,174
4,739
3,689
6,537
124
944
2,299
6,288
6,495
4,693
3,413
6,690
162
1,098
2,464
6,817
6,887
5,590
3,591
8,174
Copyright 2008 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
PART THREE Providers of Health Services
188
stable over the years, but the total number of hospital days has declined dramatically due to sharp
reductions in the average length of stay. A relatively
small proportion of admissions to hospitals are accounted for by the smaller hospitals.
Examining hospital utilization based on population data illustrates a significant decline in discharges per thousand U.S. population as reflected
in Table 8.5. Overall explanation of this trend lies
in changes in the number of Americans, which
Table 8.5. Discharges and Days of Care, Nonfederal Short-Stay Hospitals: United States, Selected Years
Characteristic
Total
Age
Under 18 years
18–44 years
45–54 years
55–64 years
65 years and over
Sex
Male
Female
Geographic Region
Northeast
Midwest
South
West
Total
Age
Under 18 years
18–44 years
45–54 years
55–64 years
65 years and over
Sex
Male
Female
Geographic Region
Northeast
Midwest
South
West
R
I
C
A
R
D
,
A
D
R
I
E
N
N
E
1
9
0
2
T
S
1980
2003
Discharges per 1,000 population
173.4
119.5
75.6
155.3
174.8
215.4
383.7
43.6
91.3
99.5
145.7
367.9
153.2
195.0
104.4
135.1
162.0
192.1
179.7
150.5
127.6
117.1
125.8
103.9
Days of care per 1,000 population
1,297.0
574.6
341.4
818.6
1,314.9
1,889.4
4,098.3
195.5
339.7
477.2
735.9
2,088.3
1,239.7
1,365.2
546.7
605.2
1,400.6
1,484.8
1,262.3
956.9
694.4
507.9
609.8
476.4
Copyright 2008 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
CHAPTER 8 Hospitals and Health Systems
189
has led to a larger denominator. Declines in discharges are much more moderate for higher-age
individuals.
Overall, changes in technological innovation
combined with financial pressures from payers has
led to an increasing proportion of medical care
being provided on an ambulatory basis, and to
much shorter lengths of stay for equivalent diagnoses for those patients who are admitted to the
hospital. The impact of these trends is to yield a
much higher intensity or complexity of care for
R
hospitalized patients.
Table 8.6 presents hospital occupancy
rates
I
since 1975 for the nation’s hospitals. Even with
C
shorter lengths of stay, the closure of many hospiA of hostals, and an overall reduction in the number
pital beds, occupancy rates remain on the decline.
R
On average, today, only about two-thirds of the
D each
nation’s hospital beds are filled with patients
night. This trend is evident in virtually every category of hospital ownership.
In the days since September 11, 2001, and more
recently since various epidemics and natural disasters, the issue of ideal targets for hospital occupancy rates has become much more complex. How
much capacity should be maintained for potential
utilization in emergency situations is a complex
policy issue. Maintaining unused capacity costs
money. As a result, the industry has some reluctance to do so. On the other hand, operating at a
more efficient level of occupancy, say 85 or 90 percent, not only restrains the ability to respond to
normal fluctuations in utilization but also significantly impacts the ability of hospitals to respond
to a critical community emergency situation. Alternatives for providing reserve back-up capacity
for community-based emergencies have become
an important priority as communities prepare for
,
A
D
R
I
E
N
N
E
Table 8.6. Hospital Occupancy Rates by Ownership and Hospital Size: United States, Selected Years
Type of Ownership and Size of Hospital
Occupancy Rates by Ownership
All hospitals
Federal
Nonfederal
Community
Nonprofit
For profit
State-local government
By hospital size
6–24 beds
25–49 beds
50–99 beds
100–199 beds
200–299 beds
300–399 beds
400–499 beds
500 beds or more
1
9
0
2
T
S
1975
1995
2003
76.7
80.7
76.3
75.0
77.5
65.9
70.4
Percent
65.7
72.6
65.1
62.8
64.5
51.8
63.7
68.1
64.8
68.3
66.2
67.7
59.6
65.3
48.0
56.7
64.7
71.2
77.1
79.7
81.1
80.9
36.9
42.6
54.1
58.8
63.1
64.8
68.1
71.4
31.9
44.6
57.2
62.6
67.0
68.5
70.7
74.2
Copyright 2008 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
PART THREE Providers of Health Services
190
unforeseen events without significantly impacting
hospital cost structures.
STRUCTURE OF HOSPITAL
AND HEALTH SYSTEMS
Although technological advancement and reimbursement policy are among the key factors affectR
ing the development of the hospital industry over
the past half century, other dramatic changes in the
I
corporate environment of health care and particuC
larly of the hospital sector have served a prominent
A
role in affecting hospital management. Horizontal
and vertical integration and the affiliation of hospiR
tals with each other and with other sectors of the
D
health care system have been extremely important
developments in the organizational structure ,in
governance and in the operational management of
the hospital industry. These changes in the legal
and organizational environment have profoundly
A
affected how the hospital industry is structured and
lines of accountability. The introduction of an D
increasingly typical corporate environment for the
R
hospital industry has, to an extent, changed the
I
roles for the key players, affected the organizational
design, and facilitated other related changes within
E
the industry such as closures and consolidations.
Horizontal and Vertical
Integration
N
N
E
The development of organizational and financial
efficiency in the hospital industry has been most ac1
celerated by both vertical and horizontal integra9
tion. Because both of these forms of integration
have been occurring, it is certainly fair to say that
0
this is an industry in transition still seeking a level
2
of equilibrium that can respond to changes in the
health care marketplace and pricing as well as proT
viding an adequate response to the invested comS
munity. Along with horizontal and vertical integration, the industry has experienced a tremendous
phase of closures and consolidations, particularly
affecting smaller institutions. The dramatic changes
in the number of operating hospital beds and
hospitals in the United States are a result of this
process as the industry seeks to provide more
competitive products and pricing, an increasingly
market-driven health care economy dictated by
such payers as the government programs and various forms of managed care.
Both horizontal and vertical integration have experienced ebbs and flows over the past decades.
The objectives of integration of resources have also
varied depending on the participants involved and
local market conditions. National integration of
various types, particularly for horizontal integration, has also been driven in part by the behavior of
for-profit entities. To this day, the success of both
vertical and horizontal integration varies tremendously across the country, and changing economic
and market conditions suggest that such integration is a dynamic rather than static process with
players possibly assessing their assets and adding
and subtracting from their portfolios.
In horizontal integration, similar units of production affiliate with each other. For example, for-profit
and not-for-profit chains of hospitals under common ownership operating in different geographic
locations all providing similar hospital-based services would be a horizontally integrated system.
Horizontal integration occurs in the for-profit and
not-for-profit sectors and can involve various levels
of organizational affiliation from direct ownership
to looser affiliation arrangements. Horizontal integration, designed to provide an enhanced level of efficiency of scale across multiple institutions and in
related geographic areas, may serve to reduce duplication of services and marketplace competition. In a
form of horizontal integration associated with regionalization of health services, smaller hospitals
may feed into larger tertiary care facilities. Horizontal integration may also facilitate operational efficiency such as purchasing, information systems,
quality assurance, and management capacity. Horizontally integrated multihospital networks may establish contractual arrangements with other types of
Copyright 2008 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
CHAPTER 8 Hospitals and Health Systems
health care providers and participate in larger health
care delivery systems.
Vertical integration implies the establishment of
integrated health care delivery systems that incorporate all or most aspects of the health care process. In this form of integration, inpatient hospital
services, ambulatory care services, mental health,
long-term care services, and other related health
care products are incorporated into a comprehensive delivery system. Vertical integration, in many
respects, is more complicated than horizontal inteR diverse
gration because it involves a range of highly
and not always easily integrated services.Vertical
inI
tegration was prompted by the objective of negotiC
ating with insurers and managed-care providers
A be prosuch that the full range of services could
vided in a contractual arrangement. In addition,
R
vertical integration provides for feeding patient
flows into hospital inpatient services andDother critical delivery components to ensure the
, financial
viability of these institutions. Vertical integration allows for greater capture of patients within integrated systems and a more established A
institutionally based relationship with physicians. Vertically
D typiintegrated systems in managed-care settings
cally contract for a broad range of services
R rather
than just for inpatient or other discrete care. VertiI chain for
cally integrated services provide a delivery
a range of health services rather than specializing
in
E
only one product.Vertically integrated systems have
N
greater capture of premium dollars but at the same
time, assume a greater degree of financial
Nrisk. This
increased risk has represented a significant chalE
lenge in recent years. Some vertically integrated systems have also established their own health plans
independently or in conjunction with insurance
en1
tities. However, this trend has faced significant
9
challenges from financial and legal perspectives
and they increase the risk to the institutional
0
provider.
2
Both horizontally and vertically integrated
systems of care need to align physician interests
with
T
institutional objectives. This has always been a challenge in health care and continues to beSso, particularly with today’s more competitive markets and
191
pricing pressures. Vertically integrated systems may
have a greater likelihood of success in this regard
because they can control a broader range of delivery
systems and capture more of the health care dollar.
Physician ownership initiatives such as for ambulatory, surgery centers, or even specialty hospitals are
an additional threat to hospital delivery systems.
HOSPITAL ORGANIZATION
The traditional organization of hospitals is centered around three sources of power. These are the
governing entity, the medical staff, and the
administration.
Traditional hospital governance was predicated
on independent institutions each with its own
corporate-style board. Legally and structurally, the
governing body has ultimate authority for all activities and decision making within the organization,
delegating certain tasks among administration and
the medical staff. Among nonprofit entities, these
boards were historically composed of well-to-do
individuals who could provide a platform for fundraising. Over time demands for accountability resulted in substantially ramped-up professional representation on these governing bodies. Physicians,
accountants, attorneys, and others with a knowledge base relevant to institutional governance were
elected to membership. Although frequently a
volunteer activity with minimal, at least by corporate standards, pay and fringe benefits, public service was the key motivation. For-profit entities have
typically been components of larger corporations
with advisory rather than legally binding governing
boards.
Hospital governing entities have delegated dayto-day management of the institution to hospital
administration and the clinical medical affairs to
the medical staff, which itself is typically formally
organized with by-laws, elected officials, and specific duties and responsibilities.
Copyright 2008 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
192
In recent years, considerable effort has been
directed toward educating members of governing
entities and hospitals to better understand the principals and legal responsibilities of hospital management and to more critically assess decision-making
activities, particularly pertaining to large capital
investments, organizational mission, the role and
management of medical staff, and contractual arrangements with other entities.
With both horizontal and vertical integration,
the ultimate governance responsibility is typically
R
shifted to the highest level of organizational structure. Depending on corporation status of compoI
nents within the larger organization separate
C
boards may exist with statutory authority or may
A
serve primarily in an advisory capacity. In the forprofit sector, a parent organization governing
R
board serves a corporate role analogous to that of
D
any public or privately held for-profit corporation.
In the publicly held environment, the corporate
,
board has an additional legal responsibility attributable to securities; regulation and corporate
governance are defined by state and federal laws.
A
For all governing entities, specific duties and responsibilities are specified in the legal charter D
or
other documents creating the organization and
R
defining the duties, responsibilities, and memberI
ship of the board. With increased accountability for
individual and collective acts of governance, board
E
members must assume that they do have personal
N
and professional liability to perform their corporate
duties in an appropriate fiduciary manner.
N
Hospital administration has also changed appreE
ciably over the years moving toward a more traditional corporate operational approach. In addition,
hospital management increasingly incorporates the
1
delegation of responsibility to an array of other
9
managers including, on the front lines, departmental administrators. Specific technical expertise
0
is typically incorporated into the management
structure in such areas as information systems,2finance, legal environment, quality assurance, marT
keting, and contracting. Traditional roles such as
S
patient care, including the hotel function, physical
plant, admissions, discharge, other operational
PART THREE Providers of Health Services
responsibilities, and various other key functions,
are also represented.
Today’s hospital administrators are often defined by traditional corporate titles and attractive
pay packages. In the not-for-profit sector, seniorlevel hospital managers typically earn from the
$100,000s to more than $500,000 per year. In the
for-profit sector, these managers may also receive
stock and stock options and other equity-related
benefits. In both nonprofit and for-profit sectors,
managers typically receive valuable benefit packages and in some instances, pay for performance
and other types of bonuses. Hospital administrators usually have a management-related background or have clinical training and have worked
their way into a management position or some
combination of both. Hospital managers, like their
employees, work in a relatively high-stress and demanding environment, answering not only to their
formal bosses, but also to the public, consumers,
physicians, and other constituencies.
THE HOSPITAL AND
MEDICAL STAFF
With authority delegated from the governing entity,
the hospital medical staff has specific responsibilities related to the clinical care provided in the facility and regulation of those individuals who practice
clinically. Hospital and medical staffs are typically
organized with elected officials, various committees, and with a leadership role represented by the
president of the medical staff.
State medical practice laws generally prohibit direct employment of physicians by hospitals. As a
consequence, and due to historical independence
of physician practices, physicians and other health
care professionals have affiliated with institutions
such as hospitals in a variety of other ways. Historically, these affiliations have primarily been through
membership in hospital medical staffs. More recently, hospitals and physicians have affiliated
Copyright 2008 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
CHAPTER 8 Hospitals and Health Systems
through joint ventures such as physician/hospital
organizations, indirect employment of practitioners
in other contractual arrangements, hospital purchases of group practices, and a variety of other
models.
Hospital medical staff membership has generally
followed a model whereby physicians apply for
hospital privileges in their area of specialty and are
vetted by a committee of the hospital medical staff
supported by administration. If found to be of
good character and having a reputable clinical repRwhich is,
utation, physicians are granted privileges,
in essence, the ability to admit and discharge
paI
tients, provide care within the hospital facilities,
C
and serve as a participating member of the medical
A
staff. Although the governing entity is ultimately
responsible for granting privileges, this responsibility
R
is usually delegated to the medical staff in recogniDand abiltion of their knowledge of clinical practice
ity to assess professional skills. The evaluation
of
,
individuals for the granting of privileges is one of
the key and most important roles of the medical
staff. Physicians, for example, are evaluated
on
A
their medical and specialty residency training, their
track record of clinical care as reflected D
in medical
malpractice and other quality assurance R
indicators,
and their reputation in other respects.
I he or she
When a physician is granted privileges,
remains subject to surveillance by the medical
E staff
to ensure continued maintenance of a minimum
N
level of quality of care. This surveillance typically
consists of monitoring cases to assess any
Ninstances
for patterns of poor quality of care as well as other
E
indicators of difficulty such as being associated
with a physician impaired with alcohol or drug or
other abuse. Hospitals and their medical1staffs also
serve a regulatory role in reporting violations of
clinical practice standards by physicians9and other
practitioners to state licensing agencies0and other
entities.
Physicians, as members of the medical2staff, may
participate in various committee assignments
and
T
historically were expected to provide some level of
S many inindigent care although this requirement in
stances has largely dissipated. In most hospitals
193
physicians are also expected to utilize their clinical
privileges only in those areas in which they have
proper training and credentialing.
Physicians and other professionals who are less
frequently utilizing a specific hospital may be
granted a separate category of privileges for occasional use with less expected participation and
fewer responsibilities. Physicians who are interested in clinical leadership positions may assume
responsibility for medical staff committees or seek
to be a leader in the medical staff hierarchy. Increasingly, physicians who are interested in managerial roles may also be employed for that purpose
by the hospital on the administration side, typically
a position such as vice president for medical affairs.
In addition to credentialing physicians for hospital privileges, the medical staff is typically responsible for ensuring the quality of care provided
in the hospital under delegated authority from the
governing entity. Various committees may be
formed for this purpose, including a quality assurance committee or other peer review committee.
The medical staff will seek to provide feedback to
physicians and other clinicians who are not meeting expected standards of the quality of care in
their clinical practices within the institution. This
feedback can take many forms, including quantitative data assessment comparing each individual to
the norms of other practitioners in their specialties,
or even informal feedback from the medical staff
president or a clinical department chief. Ultimately,
hospital privileges may be revoked in extreme situations where clinical standards are clearly not met.
In this instance, appropriate due process must be
followed utilizing specified procedures as outlined
in the medical staff bylaws.
The increasing utilization of computerized information systems and a more interested younger generation of clinicians have greatly accelerated the attention to data-based assessments of quality of
care. National voluntary organizations have worked
hard to promote these efforts so as to elevate the
overall quality of care provided in the nation’s
hospitals. Voluntary accrediting agencies, in particular, have also increasingly pressured institutional
Copyright 2008 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
PART THREE Providers of Health Services
194
providers to incorporate quality assurance mechanisms in their ongoing production methods. Many
types of approaches have been developed in this regard, including a range of processes designed to encourage the use of clinical approaches that are validated from scientific and evidence-based research.
Many clinical quality assurance and quality improvement techniques have been adapted from the
corporate environment, particularly industrial settings as well. Payers are also demanding enhanced
quality surveillance and improvement.
R
In contrast to a typical corporate environment,
hospitals do not directly employ most physicians,
I
who are key decision makers and decide resource
C
allocation and utilization. Thus, the medical staff
A
serves an important role in aligning physician behavior and objectives with institutional needs.
R
Medical leadership is particularly important in
D
today’s complex environment to facilitate this relationship. Ultimately, the traditional hospital struc,
ture, particularly with regard to the medical staff, is
inconsistent with managing an organization that
faces numerous competitive and pricing pressures.
A
Some medical staff organizations, such as those
D
in group practice, model HMOs that directly own
all resources in their systems, and certain governR
mental entities such as the military and veteran’s
I
administration hospitals, have more direct control
over the medical staff.
E
KEY ISSUES FACING THE
HOSPITAL INDUSTRY
N
N
E
1
The hospital industry almost continuously faces key
9
critical issues that challenge its structure, viability,
and roles in health care. This section discusses
0
many of these issues.
2
T
Specialty Hospitals
S
In recent years, the development of highly specialized hospitals has gained considerable traction.
Although not a new concept by any means, the
more rapid recent development of these specialty
hospitals poses a threat to community general hospitals to a much greater extent than in past years.
The new specialty hospitals include those focused
on cancer and heart disease and other highly discrete areas of practice in lucrative fields such as orthopedic surgery.
To further complicate the controversy over specialty hospitals, these institutions are increasingly
partially owned by the physicians who practice
within them. Ironically, in the early days of the
modern development of hospitals, physician ownership was not unusual. However, the popularity of
physician-owned proprietary hospitals today has
been challenged by two ramifications. The first is
that these hospitals draw profitable patients from
community hospitals, and the second potential
conflict of interest is represented by physicians admitting patients to hospitals in which they have an
ownership interest.
Of course, our quality of care data suggest that
high volumes of discrete services can enhance quality. From some perspectives, highly specialized institutions may in fact provide the best care. On the
other hand, many of these specialty hospitals may
siphon off insured and relatively healthier patients,
leaving the less profitable and more complicated
cases to community general hospitals.
Physician ownership of specialty hospitals raises
concerns that financial incentives will affect the
treatment decisions, such as the use of specialty
and diagnostic services. In addition to providing
care to the less complex and more profitable cases,
these hospitals may also leave the uninsured and
underinsured to community and public hospitals
for treatment. The combination of adverse selection
and less private insurance and public coverage for
community general hospitals and government facilities does raise significant policy concerns.
Federal policy development has been slow to
respond to this trend. Medicare has complex rules
regarding physician ownership of health care resources and potential conflicts of interest. And both
the Medicare and Medicaid programs have a valid
Copyright 2008 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
CHAPTER 8 Hospitals and Health Systems
concern with respect to the distribution of health
care costs across all facilities and patient groups.
The impact of specialty hospitals on community
general hospitals and governmental hospitals has
yet to be fully assessed, but this development is potentially significant clinically and financially.
Changes in Technology
The hospital industry is all about technology. Although the hotel function of a hospital is in a way
R of techprimary to its purpose, it is the provision
nology that is its true mission. Technology
has
I
shaped the physical and operational structures of
C
hospitals, has affected the lives of patients and families, and has provided a delivery vehicleAfor physicians in clinical practice.
R
From its earliest days as a modern institution, the
D defined
availability of technological resources has
the services provided in hospitals. The discovery
of
,
anesthesia and of antisepsis clearly established the
early stages of the provision of surgical care. The
vast array of imaging technologies has had
A tremendous impact on effective intervention for patients
D
seeking care in the hospital setting. Laboratory,
diagnostic, and other technological innovations
have
R
also greatly facilitated clinical medicine. Successful
I of inintervention is dependent on the technology
novative therapies including pharmacological
E interventions and surgical techniques.
N
More recently, the huge range of technological
advancements that have vaulted to the forefront
of
N
the tertiary care role of inpatient services within
E
hospitals have included organ transplantation, a
vast array of minimally invasive surgical technologies, advanced cardiac treatments, primarily
1 through
a variety of surgical interventions, an impressive
9
range of successes in advanced emergency
and
trauma care, and vast improvements in the
underly0
ing technologies related to information systems,
2
medical records, and other aspects of hospital
and
health care operations to facilitate the T
delivery of
services to patients. Technological advances have affected obstetric patients, pediatric care S
needs, patients with terminal illnesses, and a range of other
195
problems that present to the inpatient side of hospital operations.
Technological advancement has led to the development of increased specialization and clinical
practice, expansion of specialized services, new
medical and surgical specialties, and treatments for
many diseases for which little curative or other care
could be provided in the past. Advanced technologies including the many applications of lasers, the
use of ultrasonic technology for treatment, and
more recently, the development of automated surgical assistant or robot technologies have all been
revolutionary.
Hospitals operate in competitive markets and
the pressure to provide a full range of technology,
and to keep that technology current, yields significant cost pressures and even potential conflicts
with medical staff members. Insurers and employers as well as government entities seek to pay for
the latest technologies, but at efficient pricing.
The continuing advancement of technology is a
double-edged sword providing us with tremendous new capabilities, but at the same time, many
challenges. The hospital, perhaps more than any
other sector of the health care system, faces these
opportunities and challenges in the most dramatic
ways. And, ultimately, it is their customers, their
patients, and their physicians who utilize these
hospitals and health care systems, who have the
highest expectations and often the least sensitivity
about costs.
Clinical Practice Patterns
Hospital design and operations are significantly affected by accepted clinical patterns of practice. The
increasing attention to best practices and practice
norms of various types, particularly under quality
assurance programs, requires institutional adherence to various protocols and guidelines. Information systems and other operational requirements
must also be compliant with the need to provide
evaluative information to assess and report on
physician clinical patterns of practice. Medicare
and many managed-care contracts require such
Copyright 2008 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
196
reporting. Accreditation by the Joint Commission
for Accreditation of Health Care Organizations and
other specialty accreditation bodies also requires
the availability and interpretation of data.
In addition to the availability of appropriate
information to monitor and evaluate clinical protocols and practice guidelines, institutions are increasingly expected to offer a governance structure
that assigns responsibility for these activities. Typically, in most community hospitals, that responsibility is delegated from the governing body to the
R
medical staff. The governing board and institutional
administration, however, retain responsibility for
I
successful compliance with these requirements.
C
Individual practitioners are likewise increasingly
A
being held accountable for their practice patterns
and behavior through a variety of monitoring and
R
feedback mechanisms.
D
The complexity of integrating all the requirements pertaining to clinical practice is of itself a sig,
nificant burden on institutional operations. Legal
and ethical expectations, combined with reporting
requirements contained in various contractual A
arrangements, further enhance the depth and comD
plexity of this obligation. Physician independence
has been significantly weakened by the introducR
tion of various external regulatory requirements.
I
Reimbursement Mechanisms E
N
Hospitals and hospital systems are heavily constrained by the reimbursement mechanisms that
N
pay their bills. The most significant source of
E
funds for most hospitals is the federal Medicare
program. As discussed elsewhere in detail in this
book, financial mechanisms for reimbursement
1
under the Medicare program have become increasingly complex. Medicare has moved 9to
reward efficiency and specialization while increas0
ingly squeezing institutional cash flow. Medicare,
2
being a federal program, also has significant regulatory and force of law powers unknown to thirdT
party insurers in the private sector. Medicare has
S
imposed an array of requirements to reduce fraud
and abuse, but these efforts have had secondary
PART THREE Providers of Health Services
effects in complicating organizational administration and financial arrangements.
Nongovernmental sources of payment, primarily
from managed-care organizations, have themselves
become fraught with complexity and cost pressures. Most payers now seek a competitive market
advantage in pricing in an attempt to drive down
the cost of health care, while at the same time shifting an increased burden of cost to the consumer.
The negotiated per diem rates are heavily discounted and many insurers exclude a range of reimbursements for various specific services.
Many third parties also require reporting from
institutional providers on utilization patterns, use
of resources and services, and other parameters of
the care process. Hospitals are generally expected
by payers to provide extensive oversight of practitioners through aggressive credentialing efforts
and other responsibilities. All these developments
have resulted in pressure to improve efficiency,
reduce waste and duplication, and provide care
as quickly as possible and at the lowest possible
cost.
While payers are increasingly squeezing payments to all providers, hospitals in particular are
susceptible to financial pressures. Hospitals provide services that require a high degree of capital investment, have limited control over the cost of
many of their products due to such considerations
as shortages of nursing and other specialized personnel and the high cost of innovative products,
and finally, the expectations on the part of both
consumers and individual practitioners for reasonable ambience and excellent outcomes.
Academic Medical Centers
Academic medical centers typically consist of medical schools and their primary teaching hospitals.
Academic medical centers provide tertiary, secondary, and primary care but have a principal focus
on biomedical research, teaching of medical residents and medical students, and often an array of
other professional training, research, and service activities. These organizations are highly complex
Copyright 2008 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
CHAPTER 8 Hospitals and Health Systems
with a multitude of power structures, funding
sources, and sometimes conflicting missions.
Hospitals that are part of academic medical centers are operationally constrained by the demands
of the teaching mission, particularly with regard to
medical students and postgraduate medical education, and a mandate to conduct both basic biomedical and applied clinical research. Financial efficiency and consumer satisfaction are not typically
the top priorities. Physicians and researchers place
considerable demands on these organizations to
R and to
provide the latest technology and staffing
allow for teaching and clinical investigation.
I
The success of academic medical centers in
C
achieving their missions should be a national priA of our
ority. The long-term strengths and successes
health care system depend on this. Although not
R
necessarily widely acknowledged, financial effiD priority
ciency in fact should probably not be a top
from a national health policy perspective.
, Unfortunately reimbursement policies by Medicare and
other government and private payers typically do
not overtly allow enough latitude for academic
A medical centers. In addition, academic medical centers
are frequently the providers of last resort,Dfurther restraining cash flows and viability. Local government
R
and, to an extent, private insurers through cost
I
shifting, pick up part of the tab.
A lot of attention has been directed
E toward
academic medical centers in recent years. The chalN
lenge is to reconcile the needs for medical education
and research with the fiscal realities of
N available
resources in a manner that will meet our nation’s
E
educational and clinical needs. This remains a huge
challenge for the nation’s health care system.
1
9
SUMMARY
0
The hospital industry has faced numerous challenges over the years and will continue 2
to do so in
the future. Markets have changed, pricing
T pressures have increased, and consumer and payer
expectations have evolved. Yet, throughSit all, our
nation’s hospitals have continued to provide the
best hospital-based care in the world, delivering a
197
technology that is second to none with top-notch
staff dedicated to patient care.
REVIEW QUESTIONS
1. Describe the historical development of
hospitals in the United States.
2. Describe the differences between nonprofit
and for-profit hospitals.
3. List the major trends that have occurred
within the hospital sector.
4. What is horizontal integration, and why is
it used?
5. What is vertical integration, and why is
it used?
6. Describe the internal organization of
community hospitals.
7. Describe the key issues facing the hospital
industry.
REFERENCES & ADDITIONAL
READINGS
Birkmeyer, J. D., Siewers, A. E., Finlayson, E. V. A.,
Stukel, T. A., Lucas, F. L., Batista, I., Welch, H. G.,
& Wennberg, D. E. (2002). Hospital volume and
surgical mortality in the United States. New England
Journal of Medicine, 346, 1137–1144.
Davis, M., & Heineke, J. (2003). Managing services:
Using technology to create value. Boston: McGrawHill/Irwin.
Gapenski, L. (2004). Healthcare finance: An introduction
to accounting and financial management (3rd ed.).
Chicago: AUPHA Press/Health Administration Press.
Halm, E. A., Lee, C., & Chassin, M. R. (2000). How is
volume related to quality in health care? A systematic
review of the research literature. Prepared for
National Academy of Sciences, Interpreting the
volume-outcome relationship in the context of
health care quality workshop. Washington, DC.
Kelly, D. L. (2003). Applying quality management in
healthcare: A process for Improvement. Chicago:
AUPHA/Health Administration Press.
Martin, L. L., & Sage, R. (Eds.). (1993). Total quality
management in human service organizations. New
York: Sage Publications.
Copyright 2008 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
CHAPTER 9
The Continuum of Long-Term Care
Connie J. Evashwick
CHAPTER TOPICS
Definition of Long-Term Care
Clients of Long-Term Care
R
I
C
A
R
D
,
LEARNING OBJECTIVES
Upon completing this chapter, the reader
should be able to
1. Describe who uses long-term care and
under what circumstances.
How Long-Term Care Is Organized
Service Categories
Integrating Mechanisms
Long-Term Care Policy
A
D
R
I
E
N
N
E
2. Explain the role and scope of services
included in long-term care.
3. Articulate how long-term care services
are organized, operated, financed, and
integrated.
4. Evaluate model delivery system approaches
to long-term care for the future.
5. Articulate national policy issues pertinent to
long-term care.
1
9
0
2
T
S
198
Copyright 2008 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
CHAPTER 9 The Continuum of Long-Term Care
WHAT IS LONG-TERM CARE?
■
A child with cerebral palsy attends a special
needs classroom in a public school, with therapy available on-site, and her parents care for
her when she is at home.
■
An 85-year old recovering from a broken hip
receives meals on wheels during theRweek and
relies on her daughter for meals over the
I
weekend.
C in shelA young man with schizophrenia lives
tered housing, with financial assistance
Aprovided
through a public housing voucher program and
medication or counseling assistanceRavailable
from an on-site staff when needed. D
An elderly couple, one of whom is blind
from
,
advanced glaucoma and one of whom is
crippled with severe arthritis, uses a moneymanagement service from a local community
A
agency to pay their bills, since neither can write
D
a check.
R sclerosis
A middle-aged woman with multiple
has a live-in attendant to assist her with the
I
activities of daily living.
■
■
■
E
All these are examples of long-term care provided by formal or informal sources. N
Long-term
care is defined as health, mental health,
N residential or social support provided to a person with
E
functional disabilities on an informal or formal
basis over an extended period of time with the
goal of maximizing the person’s independence.
1
Services change over time as the person’s and
9
caregivers’ needs change.
The goal of long-term care is to help
0 people
achieve functional independence, in contrast to the
2 of all
goal of acute care, which is to cure. People
ages and a wide range of clinical diagnoses
T need
long-term care. The vast majority of long-term care
Sand fam(80 to 90 percent) is provided by friends
ily. However, formal services are essential to enable
199
the informal system to be sustained. The formal services that provide long-term care are described in
this chapter using a conceptual framework referred
to as “the continuum of long-term care.” The ideal is
an integrated set of services that provides continuity of care over time and across settings. In reality,
services are highly fragmented due to financial
drivers, local community variation, and a lack of
uniform federal and state policies. This chapter provides an overview of the ideal continuum of care
juxtaposed with the reality of existing services,
structure, and policies.
WHO NEEDS LONG-TERM
CARE?
The clients of long-term care are growing rapidly.
They represent a mosaic of population segments of
those with functional disabilities. Three intersecting
concepts warrant explanation to understand the
users of long-term care.
The fundamental reason that a person needs
long-term care is because they suffer from one or
more functional disabilities. Functional ability is a
person’s ability to perform the basic activities of
daily living (ADLs) or instrumental activities of daily
living (IADLs). ADLs include the ability to bathe,
dress, perform personal care and grooming, walk,
transfer from bed to chair, maintain bowel and
bladder continence, and eat. ADLs were initially defined by Katz and colleagues through research (Katz
et al., 1963), and years of study have produced commonly accepted measures and scales of functioning.
ADLs tend to involve large motor skills, and they are
lost in a predictable order. IADLs are more loosely
defined (Lawton & Brody, 1969) but typically
involve cognitive reasoning and finer motor skills.
IADLs include telephoning, managing money, taking medications, grocery shopping, housekeeping,
doing chores, and using transportation.
The conditions that underlie the need for longterm care may be physical health, mental health,
Copyright 2008 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
PART THREE Providers of Health Services
200
57.6%
80⫹
73.6%
38%
57.7%
28.3%
70 –74
46.6%
30.7%
44.9%
24.2%
55– 64
35.7%
13.9%
22.6%
8.1%
25– 44
13.4%
5.3%
10.7%
3.8%
7.8%
Under 15
0
20
R
I
C
A
R
D
,
Severe Disability
Any Disability
40
60
80
Figure 9.1. D i s a b i l i t y P re v a l e n c e b y A g e , 1 9 9 7
SOURCE: From Health, United States, 2005 (Special Excerpt), Trend Tables on 65 and Older Population (DHHS Pub.
A Health Statistics.
No. 2006-0152) (Table 58, p. 243), National Center for
D
or a combination, as well as family situation and
R
environmental context. Of the 288 million people
I
in the United States in 2005, more than 12 percent,
or more than 35 million people suffered from some
E
type of disability that limited their ability to perN
form basic activities of daily living (National Center
for Health Statistics, 2005). Limitations in funcN
tional ability affect people of all ages but increase
E
with age and the concomitant chronic conditions
that accumulate with aging. Figure 9.1 shows the
estimated number of people with disabilities. How
1
a person manages a functional disability depends
9
on several factors, including other health conditions, age, family and social support, economic sta0
tus, housing, and personal preference.
2
Chronic is defined by the National Health Interview Survey as any condition that lasts 3 months
T
(or 90 days) or more (National Center for Health
S
Statistics, 2007). Chronic conditions may derive
from physical or mental conditions. Over the
progression of a disease, both may occur. Chronic
conditions may be as life-threatening as coronary
artery disease or as harmless as mild arthritis. In
2005, an estimated 133 million people had some
type of chronic condition (Hoffman, Rice, & Sung,
1996). Chronic conditions often (although not always) result in functional disabilities.
An impairment as used by the National Health
Interview Survey is defined as “a chronic or permanent defect, usually static in nature, that results
from disease, injury, or congenital malformation. It
often represents a decrease in or loss of ability to
perform various functions.” Permanent impairments, such as limb amputation or blindness, may
require an initial adjustment and are then more or
less stable. People may attain a level of independence by learning special skills to overcome the disability or by using adaptive devices. For example, a
person with myopia can have their vision corrected
by wearing glasses or contact lenses and thus suffer
Copyright 2008 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
CHAPTER 9 The Continuum of Long-Term Care
no disability as a result of their impairment.
Nonetheless, impairments are closely associated
with functional disability.
Impairment, chronic condition, and functional
ability are intertwined. For example, a person who
is blind, who lives with a supportive family, learns
Braille, and masters the immediate environment,
may achieve a fair degree of independence on a
daily basis. However, if that person ages and becomes cognitively diminished, he or she may no
longer be able to remember the environment, and
R (or just
without the ability to use the visual clues
simple notes or lists) that a person withI sight can
use to help overcome cognitive weaknesses, is less
C
able to function independently. If that person then
A impairslips and breaks a hip, suffers a permanent
ment, and has to use a walker, they will lose more
R
functional ability than a sighted person or a person
D to unwithout cognitive impairment who is able
derstand rehabilitation routines.
,
In addition to a person’s health and mental
health, social situation, finances, housing, and
community context all affect the extent A
to which a
person can perform ADLs and IADLs independently and the type of assistance they D
may need.
Contrast a male veteran in a wheelchairRwho lives
with a spouse, can afford a personal caregiver, resides in a one-story home, and lives Iin a large
urban community served by a community-based
E
agency coordinating services for the disabled and
N
a Veterans Affairs hospital that provides a full
range of health care for people with N
disabilities
with an elderly widow who breaks her hip, has no
E
family nearby, has no income except Social Security, resides in a two-story walk-up in a small rural
town, and must travel 30 miles to reach1a hospital
with an orthopedic service. The man will main9 a multitain his independence by working with
faceted support system; the older woman
will
0
most likely end up moving to a relative’s home or
an assisted living facility for those 2with low
income and be forced to move awayTfrom her
friendship network.
The United States makes no single,Sconstant,
routine count of people needing long-term care
201
that factors in all the variables that determine if,
what type, and how much care a person needs to
perform ADLs and IADLs. Rather, subsets are
counted, and each subset of the total population
has a segment that may require long-term care at
some point from formal or informal sources. Population segments at high risk of needing longterm care are growing steadily. They include the
aged (especially those age 75 and older), those
with certain chronic conditions (such as stroke,
mental illness, degenerative neurological conditions, Alzheimer’s disease), people positive for
HIV/AIDS, and children with special health care
needs, to mention just a few. For each group, and
each individual, the care needed will vary and will
be some combination of informal care provided
by family and friends and formal care provided by
external organizations. The rationale for structuring the long-term care system for specific segments of the population rather than a single encompassing system is based on the differing
needs of each segment and the multiple factors
that shape service delivery, particularly financing.
Users of long-term care services are called by differing terms, depending on the service. Table 9.1
shows the terms used by various services.
Table 9.1. Te r m i n o l o g y f o r U s e r s o f
S e l e c t S e rv i c e s
S e rv i c e
Te rm f o r C l i e n t s
Nursing homes
Hospitals
Adult day services
Home care
Hospice
Outreach
Wellness programs
Disease management programs
Durable medical equipment
Assisted living
Residents
Patients
Participants
Clients
Patients
Consumers
Clients
Enrollees
Customers
Residents
Copyright 2008 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
PART THREE Providers of Health Services
202
■
HOW IS LONG-TERM CARE
ORGANIZED?
One of the greatest challenges of long-term care is
that there is no single organized formal delivery system. As noted earlier, the vast majority of long-term
care is provided by friends and family. Care is
orchestrated around the unique needs of each indiR
vidual and family, as well as the resources of the particular community. A person may require multiple
I
services, provided in a range of settings, and by proC
fessionals representing a broad spectrum of disciplines. Moreover, services can be expected to change
A
over time as the client’s and family’s needs change or
R
as new technologies arise.Thus patterns of care vary,
for population segments as well as individuals. D
To analyze long-term care service delivery, the
,
conceptual framework of an ideal continuum of
long-term care is used. The continuum of care is
defined as
A
A client-oriented system composed of both
services and integrating mechanisms that
guides and tracks clients over time through
a comprehensive array of health, mental
health, and social services spanning all levels of intensity of care. (Evashwick, 1987)
D
R
I
E
N
The ideal continuum of care is the formal care
system that complements the informal services proN
vided by friends and family. The ideal continuum of
E
care is a comprehensive, coordinated system of care
designed to meet the multifaceted needs of persons
with complex and/or ongoing problems efficiently
1
and effectively. A continuum is more than a collection of fragmented services. It includes mechanisms
9
for organizing those services and operating them as
0
an integrated system.
The purpose is to facilitate the client’s access2to
the appropriate services at the appropriate time,
T
quickly and efficiently. Ideally, a continuum of care
S
does the following:
■
Matches resources to the client’s health and family circumstance.
■
■
■
■
■
Monitors the client’s condition and changes services as needs change.
Coordinates the care of many professionals and
disciplines.
Integrates care provided in a range of settings.
Enhances efficiency, reduces duplication, and
streamlines client flow.
Pools or otherwise arranges financing so that
services are based on need rather than narrow
eligibility criteria.
Maintains a comprehensive record incorporating
clinical, financial, and utilization data.
A true continuum should serve three major
goals: (1) Provide the health and related support
services that foster independence, for the client as
well as the family, (2) achieve cost-effectiveness by
maximizing the use of resources, and (3) enhance
quality through appropriateness and continuity of
care. Some clients may use only select components
of the system and may remain involved with the organized system of care for a relatively short period
of time; others may use only a limited and stable set
of services over a prolonged period of time.
Continuum Overview
More than 60 distinct services can be identified in
the complete continuum of care. For simplicity, the
services are grouped into seven categories, as
shown in the schematic and in Table 9.2. The seven
categories represent the basic types of health care
and related services that a person could need over
time, through periods of both wellness and illness.
Table 9.2 lists select services within each category
but should not be interpreted as the complete list of
all health and mental health services. The table
does not include social support services, which also
comprise a lengthy list.
By definition, the continuum of care is more
than a collection of fragmented services; it is an integrated system of care. The United States health
care delivery system has evolved historically as
highly fragmented. Integration of services does not
happen automatically. For providers, payers, and
clients to gain the system benefits of efficiencies of
Copyright 2008 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
CHAPTER 9 The Continuum of Long-Term Care
203
Table 9.2. C a t e g o r i e s a n d S e rv i c e s o f t h e C o n t i n u u m o f C a re*
Extended
Skilled nursing facility
Step-down unit
Swing bed
Nursing home follow-up
Intermediate care facility for the mentally retarded
Long-term care hospital
Psychiatric hospital (residential model)
Acute
Medical/surgical inpatient services
Psychiatric acute inpatient services
Rehabilitation short-term inpatient services
Interdisciplinary assessment team
Consultation service
Ambulatory
Physician’s office
Outpatient clinics
■ Primary care
■ Specialty medical care
■ Rehabilitation
■ Mental health
■ Surgery
Psychological counseling
Day hospital
Adult day services
Home Care
Home health—Medicare
Home health—Private
Hospice
High-technology home therapy
Durable medical equipment
Home visitors
Homemaker and personal care
In-home caregiver
R
I
C
A
R
D
,
A
D
R
I
E
N
N
E
Outreach and Linkage
Screening
Information and referral
Telephone contact
Emergency response system
Transportation
Senior services program
Meals on Wheels
Mail order pharmacy
Wellness and Health Promotion
Educational programs
Exercise programs
Recreational and social groups
Senior volunteers
Congregate meals
Support groups
Disease management
Housing
Continuing care retirement community
Independent senior housing
Assisted living
Congregate care facility
Adult family home
Group home
Board and care facility
Alcohol and substance abused facility
1
9
*Lists of services within each category are not
0exhaustive.
From “Definition of the Continuum of Care,” by C. Evashwick, 2005, in The Continuum of Long-Term Care,
2
C. Evashwick (Ed.), Albany, NY: Delmar.
T
S
Copyright 2008 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
PART THREE Providers of Health Services
204
INTER-ENTITY
STRUCTURE AND
MANAGEMENT
INTEGRATED
INFORMATION
SYSTEMS
CARE
COORDINATION
INTEGRATED
FINANCING
EXTENDED
ACUTE
AMBULATORY
HOME
OUTREACH
R
WELLNESS
I
HOUSING
C
A
R
D
Figure 9.2. S e r v i c e s a n d I n t e g r a t i n g M e c h a n i s m s o f t h e C o n t i n u u m o f C a r e
, by C. Evashwick, 1987, in Managing the Continuum of Care,
SOURCE: From “Definition of the Continuum of Care.”
by C. Evashwick and L. Weiss (Eds.), Gaithersburg, MD: Aspen Publishers.
A
operation, smooth client flow, and quality of service, formal structural integrating mechanisms are
D
essential. Four integrating management systems are
R
required: inter-entity structure and management,
care coordination, integrated information systems,
I
and integrated financing (Figure 9.2).
SERVICE CATEGORIES
E
N
N
E
This section briefly describes each of the seven service categories and presents data, when available,
1
on major or select services within each category.
9
Not every client will use every service. However, the
ideal is that the services are available and accessible
0
if a person should need them. There is no set order
2
for the services, since each client will use ones appropriate for his or her individual and unique
T
needs.
S
A significant aspect of the services is that each
has its own operating characteristics, even within
the same category. Services vary according to intensity of care offered, professional and support
staffing, predominant financing, licensing, certification, accreditation, equipment, space, and significant other management dimensions. This variation
poses a challenge to managers trying to coordinate
services, as well as to payers and clients who are
trying to achieve continuity of care.
Extended Inpatient Care
Extended inpatient care is for people who are so
sick or functionally disabled that they require ongoing nursing and support services provided in a
formal health care institution, but who are not so
acutely ill that they require the technological and
professional intensity of a hospital. The majority of
extended inpatient care facilities are referred to
“nursing facilities” or “nursing homes,” although
this is a broad term that includes many levels and
types of programs. Specialty facilities range from
subacute units in hospitals to intermediate care facilities for the mentally retarded or developmentally
Copyright 2008 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
CHAPTER 9 The Continuum of Long-Term Care
disabled to psychiatric hospitals caring for the
severely mentally ill on an indefinite basis. Nursing
facilities in the nation number about 16,100, with
about 1.4 million residents at any given time
(American Association of Homes and Services for
the Aging, 2007).
The cost of a nursing facility ranges from
$4,000–7,000 per month, depending on location
and scope of services rendered. Medicaid pays for
about 47 percent of all nursing facility care, and
residents and their families pay for about one-third
R 2007).
(Center for Medicare and Medicaid Services,
The lifetime probability of ever being
I admitted
to a nursing home (under the present U.S. standard
C
of care) is about 50 percent. However, average
A over the
length of stay has decreased dramatically
past 30 years, just as likelihood of admission has
R
increased. Both reflect the trend for nursing faciliD
ties to become technologically more sophisticated
and to function as short-term stopping places
, in between home and hospital rather than as permanent
residential settings.
Nursing facilities can be accredited by
Athe Joint
Commission and can be certified by Medicare and
Medicaid to participate as providers toDthose enrolled in these government programs. R
Two excellent sources of information about nursing home are the trade associations thatI represent
for-profit and not-for-profit nursing homes,
E respectively: http://www.ahca.org, http://www.aahsa.org,
N
and the Federal Centers for Medicare and Medicaid
Services, http://cms.nhs.gov
N
E
Hospitals
The nation’s hospitals are a broad array1of institutions that provide care for those with acute prob9for many
lems and emergencies, but that also care
people with chronic conditions and 0long-term
health problems. The most current information
can be found on the website of the2American
Hospital Association at http://www.aha.org.
T
Community general hospitals are the most prevaS
lent type, numbering about 4,936 of the 5,756
total U.S. hospitals existing in 2005 (American
205
Hospital Association, 2007a). However, various
types of hospitals specialize in long-term care, including categories of psychiatric, rehabilitation,
chronic disease, orthopedics, and long-term (defined as average length of stay of 23 days or
more). Hospitals also provide extensive outpatient
services, including many used by those needing
long-term care, ranging from rehabilitation to
mental health counseling to outpatient surgery.
Hospitals have evolved from a focus on strictly
acute care to promoting health with disease management and health education programs.
Hospitals admit more than 37 million people
each year, but this number includes those who are
readmitted who are those most likely to be longterm care users. Average length of stay is 4 to
5 days for adults under the age of 65 and about
6 days for those age 65 and older. The leading
causes of hospital admissions are chronic conditions: heart problems, cancer, mental illness, stroke,
respiratory conditions, and fractures derived from
osteoporosis.
Medicare and private insurance are the primary
payers for hospital services, with individuals paying
relatively little from out-of-pocket. However, hospital costs are the largest single category of expenditure for Medicare, other government health programs, and private insurance. Hospitals are
accredited by the Joint Commission.
Ambulatory Care
Ambulatory care services are provided in a formal
health care facility, whether a physician’s office or the
outpatient clinic of a hospital or an adult day program. They include a wide spectrum of preventive,
maintenance, diagnostic, and recuperative services
for people who manifest a variety of conditions—
from those who are entirely healthy and simply
want an annual checkup to those with major health
problems who are recovering from hospitalization
to those with chronic conditions who need ongoing monitoring. Outpatient visits to hospitals alone
numbered nearly 600 million in 2005 (American
Hospital Association, 2007b).
Copyright 2008 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
206
Adult day services (ADS) are particularly relevant to long-term care. ADS represent a daytime
program of personal care, therapeutic activities, supervision, socialization, assistance with ADLs,
midday meals, and perhaps health-related skilled
care. ADS enable frail people who cannot be alone
in their own homes to remain in the community.
By attending adult day services, people who are
functionally disabled due to physical or mental disorders and/or are moderately ill but not in need of
round-the-clock nursing care can remain in their
R
homes at night with their families or friends while
receiving the care they need during the day. ADS
I
participants may attend on an indefinite basis or
C
just while recovering from an acute episode of illA
ness. They may attend each day, or just 2 or 3 days
per week. The goals are to foster the maximum
R
possible health and independence in functioning
D
for each participant and to provide respite and
support for each caregiver and family. For many,
,
ADS programs provide an alternative to nursing
home care.
ADS programs have grown exponentially since
A
the first formal programs began in the 1970s. CurD
rently, there are about 3,400 ADS programs
throughout the nation (Cox, 2006). The average
R
daily census is about 25, but capacity ranges up to
I
38 or more people, with about three times as many
people enrolled as attend on any given day. This
E
means that ADS serve about 85,000 people per
N
day. More than 150,000 people throughout the
United States are enrolled in ADS at any given time
N
(National Adult Day Services Association, 2007).
E
ADS average daily charges were about $56 per
day in 2007, but relatively few programs make a
profit. Most depend on donations, grants, and
1
other subsidies. Medicare does not pay for ADS;
9
Medicaid pays in selective states, and many individuals pay out-of-pocket.
0
Licensure varies across states. Some states license ADS as a health service; some license it as2a
social service. ADS can be accredited by the ComT
mission on Accreditation of Rehabilitation Facilities (CARF). ADS are still gaining recognition S
by
professionals and lay people alike.
PART THREE Providers of Health Services
A key source of information about adult day
services is the National Association for Adult Day
Services at http://www.aahsa.org/naads.
Home Health
Home health care is one of the oldest components of
the continuum of care. A number of home health
agencies across the nation have celebrated their centennials. Home care today consists of several types
of services: skilled nursing care and therapies; homemaker/personal care/chore services; high-technology
home therapy; durable medical equipment; and hospice.The services may all be provided by one agency,
or an agency may specialize in only one. Each service
has distinct operating characteristics.
Home health agencies certified by Medicare must
serve people who are homebound, have a prognosis of improvement/recovery; have home care ordered by a physician; need skilled nursing, physical
therapy, or speech-language therapy; require intermittent care only; and meet conditions of participation specified by the federal Medicare legislation.
These home care agencies offer skilled services provided by registered nurses, physical therapists, occupational therapists, speech therapists, social
workers, and home health aides. They do not provide personal care or functional support on an indefinite basis. Nearly 3 million people are served by
Medicare-certified home care agencies each year
(National Association of Home Care, 2007).
Medicare-certified home health agencies numbered about 7,628 in 2004 (National Association
for Home Care, 2007). Home health agencies may
be freestanding or owned by hospitals, health departments, assisted living complexes, or other community agencies. Nearly one-half are for profit; the
others are not-for-profit or government affiliated.The
national average payments in 2004 were $129 per
visit and $4,050 per patient. Medicare is the largest
single payer, although many managed-care and
commercial insurers also pay for home care provided by Medicare-certified agencies. Medicare certified home health agencies may be accredited by
the Joint Commission or the Community Health
Copyright 2008 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
CHAPTER 9 The Continuum of Long-Term Care
Accreditation Program (CHAP). Detailed information can be found from the National Association for
Home Care and Hospice at http://www.nahc.org
and from Medicare at http://cms.gov.
Private home care agencies are not certified by
Medicare and are thus not restricted by federal regulations. Consequently, they provide a broader spectrum of home services ranging from highly skilled to
basic personal support, homemaker, and chore services. Private home care agencies bill by the hour or
the service. Many individuals pay privately. In addiRcontracts
tion, private home care agencies may have
with managed-care plans, commercialI insurers,
Medicaid, or other local government agencies.
C
Statistics on private home care agencies are limited.
Private agencies are estimated to numberA
more than
12,000 and to care for more than 5 million people
R
per year. The largest association representing both
Medicare-certified and private home careD
agencies is
the National Association for Home Care,, which can
be accessed at http://www.nahc.org.
High-tech home therapy refers to specialty care
provided in the home that requires sophisticated
A
equipment and pharmaceuticals. Examples are
Dand parchemotherapy, antibiotic therapy, enteral
enteral nutrition, and home dialysis. High-tech
R home
therapy may be provided by a Medicare-certified or
I that speprivate home care agency or by a company
cializes only in high-tech home care. This
Eservice is
mentioned separately because it has grown expoN
nentially over the past 30 years and is expected to
continue to do so as therapies are moved
N from inpatient to outpatient venues. Also, high-tech home
E
care requires additional licenses, personnel, and payment mechanisms from those required of standard
home care agencies because of the pharmaceuticals
1
and equipment involved, as well as the high level of
9
intensity of illness of the clients.
0
Hospice
2
Hospice is a philosophical approach to T
care rather
than a place. Ideally, hospice care occurs in the perS assisted
son’s home, including in a nursing home,
living complex, or other group residential setting.
207
Hospice is a concept of comprehensive and palliative care for someone whose death is imminent.
The goals are to make the person as comfortable as
possible, including using drugs to alleviate pain;
achieve emotional acceptance of death by the person and the family; and comfort and assist the family after the person’s death. Hospice uses an interdisciplinary team, including pastoral care and
bereavement counselors.
The concept of hospice was developed in Great
Britain by Dr. Cicely Saunders. The first hospice in
the United States opened in 1971. Hospice can be
organized independently or from the base of any
health care entity, including home health agencies.
Medicare has a special hospice provision. This entails detailed regulations for those organizations
that seek to be certified Medicare hospice providers,
a complex payment system, and certain expectations
of and benefits for enrollees. Commercial insurance
companies and Medicaid have tended to mirror the
Medicare benefit in covering hospice care. For a person to enroll in hospice, he or she must be eligible
for Medicare and have a projected life expectancy of
180 days or less. Both the Joint Commission and
CHAP accredit hospice programs.
The number of hospices and hospice patients
has grown steadily over the past 35 years. In 2007,
there were 3,078 hospices certified by Medicare
and numerous others that did not seek certification
(Hospice Association of America, 2007). The Medicare hospices served more than 890,000 people in
2005, or more than one-third of all those who die
during the year. The median length of stay in hospice was less than 21 days in 2006, indicating that
many people do not get the benefits of hospice as
early as they might.
Detailed information about hospice can be
found at http://www.nahc.org, http://www.cms
.gov, and http://hhpco.org.
Durable Medical Equipment
Durable medical equipment (DME) is equipment
that enables a person to accommodate a disability
and maintain independence. DME encompasses a
Copyright 2008 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
PART THREE Providers of Health Services
208
wide range of devices, from simple walkers and
canes to sophisticated wheelchairs and beds. DME
is paid for by Medicare, Medicaid, and private insurance under conditions specified by each insurer.
It may be rented or purchased, depending on the
insurer, the person’s condition, and whether the
need for the equipment is expected to be short-term
or indefinite. Companies that provide DME are distinct from other health care agencies, but home
health agencies will often assist in arranging for
DME that is needed by a person to remain in his or
R
her own home while receiving home care services.
DME is an important component of the continuum
I
of care because it enables people with disabilities
C
who might otherwise be dependent on others for
A
assistance to maintain their independence. Detailed
information about Medicare’s DME provisions can
R
be found at http://cms.gov/center/dme.asp.
Outreach
D
,
Outreach programs make health and social services
readily available in the community rather than
A
within the formidable walls of a large institution.
Health fairs at community events, senior memberD
ship programs, emergency response systems, nurse
practitioners stationed by health care systems in R
senior housing complexes, and vans for transportaI
tion to medical appointments are all forms of outE
reach. They are targeted at those who are living in
N
the community for the purpose of keeping them
connected with the health care system.
N
Many outreach programs are provided at no or
E
low charge to the consumer. They may be paid for
by a hospital, medical group, managed care company, or other health care organization as a com1
munity benefit or a loss leader to market other services. Regardless of the purpose, clients identified
9
through outreach activities should ideally be linked
0
back to the organization’s core businesses for purposes of continuity of care.
2
T
S
Wellness programs span a wide spectrum from acWellness
tivities provided for those who are basically healthy
and want to stay that way by actively engaging in
health promotion to disease management for those
with chronic illnesses who want to remain as
healthy as possible. Wellness programs include
health education classes, exercise programs, health
screenings, and disease management regimes offered at health care sites or to be used at home.
Wellness activities may be provided at no or low
charge to the client. With a few notable exceptions,
wellness activities are not paid for by third-party
payers. They tend to be provided free of charge as a
public relations tool or because the organization offering the activity appreciates that they will save
money on providing care if they can help someone
stay healthy.
Disease management (DM) programs have become pervasive and sophisticated in recent years.
They are one method for empowering consumers
who have diagnosed health problems to control
their condition so they do not become severely ill.
DM programs may also be structured so that they
are a means of facilitating clients with access to the
services clients need, when they need them. Health
plans and medical groups have been prominent
proponents of disease management and often bear
the costs.
Housing
Housing is an integral component of the continuum of care, because a person’s housing situation
affects his or her functional independence and
health status, and vice versa. For example, a
woman who lives in two-story house in New England with front steps that have no railing might slip
on the ice and break her hip. She may not be able
to go home from the hospital as soon as possible
because she cannot negotiate the front steps or access the bathroom on the second floor. In contrast,
a women who lives in a one-story Southern California bungalow with a flat path from the driveway
to the house might not slip on the ice in the first
place and, if she did break her hip for other reasons, could go home from the hospital more
quickly and easily because indoor and outdoor
Copyright 2008 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
CHAPTER 9 The Continuum of Long-Term Care
access are all on one level and inclement weather is
not likely to inhibit egress mobility.
Housing accommodations for long-term care
range from modifying existing independent housing
to independent apartments with support services to
formal assisted living (with support services incorporated into the building and the pricing) to group
homes. Services may be available within a community, such as within continuing care requirement
communities (CCRCs) or naturally occurring retirement communities (NORCs); within a facility, such
R
as within independent apartment buildings;
or
within a person’s home, such as boardI and care
homes. Various levels of housing are defined by
C
states, and are typically licensed under housing or soA
cial service agencies, not as health care providers.
In
2006, the United States had approximately 39,500
R
assisted living facilities and 2,240 continuing care reD
tirement communities (American Association
of
Homes and Services for the Aging, 2007).
,
Payment for housing is usually the responsibility
of the individual. In a few states, Medicaid pays for
assisted living as a less-expensive alternative
A to nursing home care, and group homes for the developmentally disabled or mentally ill may be D
paid for by
Medicaid or a state mental health program.
R Recognizing the frailty of populations served by some types
of housing, assisted living facilities may beI accredited
by either the Joint Commission or CARF.E
Despite its close relationship to health status,
N
housing operates for the most part in a different
sphere of licensing, regulation, and financing.
N This
separation often poses challenges for those who
E
need integration of housing and health care in
order to manage long-term care needs optimally.
Two websites pertaining to assisted 1living are
http://www.aahsa.org and http://www.alfa.org.
9
Characteristics of Major 0
Services
2
These categories encompass more than T
60 distinct
services. Each service has its own operating characS
teristics. Table 9.3 summarizes select operating
characteristics of a few of the major services.
209
The differences pose challenges to organizations
and individuals in attempting to manage care in a
unified way, as well as to clinicians in attempting to
achieve continuity of care across settings and over
time for clients. Differences in financing, licensing,
regulatory enforcement, and accreditation all pose
structural barriers to integration. The integrating
mechanisms, described next, are deliberate management actions that can be taken to facilitate clinical integration of the care for the individual client.
INTEGRATING MECHANISMS
From a client’s perspective, the many services of the
continuum should be seamlessly connected. Multiple services might be used at the same time, and
they should be coordinated. Changes in service
over time, due to a change in the client’s condition,
should be accomplished with a smooth transition
and a flow of essential information from one
provider to the other. Payment should not inhibit
access to services.
In reality, at the present time in the U.S. health
care delivery system, services are highly fragmented. Access is limited by payment constraints,
availability of select services in some geographic
areas, capacity of available services, limited health
care personnel, and other factors. Moreover, because services have evolved in an individualistic
manner, services are not automatically integrated.
Thus, to accomplish the seamlessness that is important to a client’s care, formal structural integrating mechanisms are essential. The conceptual
framework of the continuum of care includes four
basic integrating mechanisms, described next.
Inter-Entity Structure
and Management
Integrated management of services must be structured both within an organization and across
organizations. Client services are not likely to be
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PART THREE Providers of Health Services
210
Table 9.3. S a m p l e O p e r a t i n g C h a r a c t e r i s t i c s o f S e l e c t S e r v i c e s
S e rv i c e
Staffifinn g
To p P a y e r s
Skilled nursing facility
1 RN/shift; LVNs, Aides
Medicaid; private
Home health,
Medicare certified
RN, PT, OT, SP, MSW,
HHA
Home care, private
On-call staff, professional or support
persons
Hospice
Adult day services
Interdisciplinary team
of professionals led
by MD
Activity director, aides,
may or may not
have skilled professionals
Medicare; commercial
insurance; other
government
Private pay; commercial insurance; govR but not
ernment
Medicare
I
Medicare; all insurers
Assisted living
Personal care staff
C
A
Private pay; Medicaid;
R
Fund-raising
D
,
Private pay (Medicaid
in a few states)
Licensing
A c c re d i t a t i o n *
By state department of
health
By state department of
health
Joint Commission
May be only local
business license
Regional
May be separate or
part of health organization
Varies by state; may
be only business
license, state health
department, or state
social services
State housing department; varies by
state
By state health
department
Not licensed
Joint Commission
CHAP
Joint Commission
CHAP
CARF
Joint Commission
CARF
A
D commercial
CARF
Medicare;
Rehabilitation
CORF
insurance
therapists
R
None
Older Americans Act
Volunteers
Meals on Wheels
I
*CARF—Commission on Accreditation of Rehabilitation Facilities.
CHAP—Community Health Accreditation Program. E
N
N
coordinated unless the units that are providing the
administrators, and receive bills from eight or more
services are coordinated administratively, particudistinct provider entities. (A person with managedE
larly when budgeting and financial issues arise. For
example, a person with a hip fracture may be cared
for by the emergency department of a hospital,
1
acute care inpatient unit of the same or a different
9
hospital, skilled nursing facility, rehabilitation hospital or unit, home health agency, Medicare-certified
0
home health agency, private home care agency, and
2
durable medical equipment company. Even when
all these services are within the same parent orgaT
nization, the client with fee-for-service insurance
S
will fill out admission papers eight different times,
deal with eight di…