Health Care Management
This essay considers health care management in the context of the complexities of health care delivery in the United States. A brief historical overview of the development of the modern-day hospital and its management functions is presented. An in-depth discussion of the issue of governance in today's health systems follows. The essay concludes with a brief consideration of transparency and future management challenges in health care.
Keywords Corporate Model; Governance; Health Care Finance; Health Care Marketing; Human Resources; Information Technology; MCOS; Medicaid; Medicare; Philanthropic Model; Risk Management; SCHIP; Third-party Payers
Health Care Management: Health Care ManagementOverview
The hospital of the early twenty-first century bears little resemblance to the hospital of the previous century. With the exception of large teaching or research institutions, hospitals for most of the twentieth century were small local facilities with strong ties to the communities they served. The focus of these hospitals was inpatient care, surgery, and access to capital equipment such as x-ray machines and diagnostic laboratories that were beyond the means of local practicing physicians, who were for the most part primary care physicians.
The passage of Medicare in 1965 sparked an explosion of services and facilities within the health care delivery system. Physician specialty practices proliferated. Hospitals added more beds. These events, coupled with the rapid development of new technologies in diagnostics, imaging, and surgery, created a meteoric rise in health care costs. In 1983, Medicare's response to escalating prices was to institute a new system of financing based on prospective payment rather than cost reimbursement, as had been past practice. Physicians, who had been paid on a fee-for-service basis, now were being paid based on a resource-based relative value scale (RBRVS). These two changes in Medicare payment, followed by similar changes by other third party payers, created a wave of cost consciousness throughout the health care system. Small hospitals (especially small rural hospitals) faced financial crises of unprecedented proportion, and many had to close their doors. Competition for patients in urban areas increased.
One response to these cost pressures was the development of integrated health care systems. Some systems were formed by horizontal integration as fiscally stronger hospitals bought up their weaker competitors. More often, systems were formed by the process of vertical integration. In vertical integration, hospitals purchased existing businesses, such as physician practices, or started new lines of business, such as home health equipment, home health care services, or specialized medical transport services. Hospitals have also been developing new service lines to compete for patients. Examples of these include women's health programs, heart hospitals, and sports medicine institutes (Litch, 2007).Categories of Management in Modern Health Systems
As integrated health systems form and grow in complexity, their management grows in corresponding complexity. The traditional management functions of hospitals (human resources, finance, information technology, risk management, and marketing) all have to adjust and adapt to the complexities of integrated systems. In this section, a brief overview of the major management functions of health systems is presented. The section following considers the topic of governance and presents a more in-depth consideration of the governance challenges that health systems face.Human Resources
Although acute care remains their prime function, health systems are adding services that provide a continuum of patient care from prevention services, through acute care, to rehabilitative care and long-term care. As a result, human resource management has become increasingly complex, reflecting the diversity of employees required to provide staffing throughout the system. Over three hundred distinct job classifications can be identified in the health care industry (Wolper, 2004). Chief among these are the clinical support services. These include diagnostic and therapeutic services that are organized around particular medical specialties (Griffith, 1999), such as cardiac care (EKG technicians) or oncology (pathology, radiation therapy). Social services, patient education, and pastoral care are other services that have professional and specialized employment requirements.
A particular challenge in human resource management is keeping abreast of the education and certification requirements that accompany many of the most specialized jobs. Physical therapists, radiology technicians, medical technologists, registered nurses, licensed practical nurses, and certified nursing assistants, among many other professionals, are typically required to obtain certifications as well as pursue continuing education.
Most health systems divide their employees into functional departments, with authority coming from the respective department head. Some health systems have reorganized into line service arrangements with interdisciplinary teams of personnel assigned to specific patients within a specific patient population group, such as cardiac care or spine injury. Under this arrangement, the specialized employees are part of ongoing patient care and treatment rather than being called in on an as-needed basis. Under line service arrangement, patient care is unified and patient focused as opposed to function focused. This approach has proven successful in terms of both increased patient satisfaction and employee satisfaction (Litch, 2007).
Nurses are the largest category of personnel within the health system (Griffith, 1999). Nurses are responsible for the coordination and administration of patient care services throughout the health system, starting with the patient's bedside and up through the hierarchy of hospital administration. Like many functions in modern health systems, the role of nursing services is changing and evolving beyond bedside care (Wolper, 2004). They manage patient care resources, participate in continuous care planning and lead collaborative practice groups (Wolper, 2004). Nurses are also at the front line of quality improvement initiatives.Finance
The finance department is responsible for all of the functions related to the financial management of a health system. These include accounting and financial reporting, capital finance, cost control, and financial performance.
The provision of patient services generates health system revenue. Unlike most industries, in which customers pay for their purchase with cash, check, or credit card, the majority of health system customers do not directly pay for their own care. A complicated web of government, insurance companies, and businesses known as managed care organizations serve as the intermediaries between the patient and the health system. As a group, these payers are often referred to as "third-party payers."
The federal government pays the largest bill for health care costs. Medicare is a federal program that pays for people aged sixty-five and over and for people with certain types of disability. Medicaid is a federal/state partnership program that pays for low-income persons as well as seniors and individuals...
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