“THE LANGUAGE OF THE HOSPITAL”

KEY CONCEPTS

CAPACITY

THE SIZE OR CAPACITY OF A HOSPITAL IS DETERMINED BY THE NUMBER OF BEDS SET UP AND STAFFED FOR INPATIENT USE.

INPATIENT DAYS

INPATIENT DAY (ALSO REFERRED TO AS A PATIENT DAY OR A HOSPITAL DAY) IS A NIGHT SPENT IN THE HOSPITAL BY A PERSON ADMITTED AS AN INPATIENT.

DAYS OF CARE

THE CUMULATIVE NUMBER OF PATIENT DAYS OVER A CERTAIN PERIOD OF TIME.

DAYS OF CARE PER 1,000 POPULATION OVER A PERIOD OF ONE YEAR GENERALLY REFLECT ACCESS TO INPATIENT SERVICES AS WELL AS THEIR UTILIZATION.

WHEN LOOKING DAYS OF UTILIZATION THESE TRENDS ARE OBSERVABLE.

THE ELDERLY SPEND MORE TIME IN HOSPITALS THAN YOUNGER PEOPLE.

MORE FEMALES ARE ADMITTED THAN MALES.

MEN GENERALLY INCUR LONGER PERIODS OF HOSPITALIZATION.

HOSPITAL UTILIZATION IS HIGHER AMONG BLACKS THAN WHITES AND AMONG PEOPLE OF LOWER SOCIOECONOMIC STATUS THAN THE MORE AFFLUENT.

IN THE WESTERN UNITED STATES, HOSPITALIZATION IS MUCH LOWER THAN IT IS IN OTHER PARTS OF THE COUNTRY.

LEVELS OR UTILIZATION AMONG RURAL AND URBAN POPULATIONS IS ABOUT THE SAME.

AS MIGHT BE EXPECTED, LEVELS OF UTILIZATION ARE HIGHER AMONG MEDICARE AND MEDICAID PATIENTS.

AVERAGE DAILY CENSUS

AVERAGE DAILY CENSUS IS THE AVERAGE NUMBER OF HOSPITAL BEDS OCCUPIED PER DAY.

DISCHARGES

DISCHARGES REFERS TO THE TOTAL NUMBER OF PATIENTS DISCHARGED FROM A HOSPITAL’S ACUTE CARE BEDS DURING A GIVEN PERIOD OF TIME.

AVERAGE LENGTH OF STAY

AVERAGE LENGTH OF STAY IS CALCULATED BY DIVIDING THE TOTAL NUMBER OF INPATIENT DAYS BY THE TOTAL DISCHARGES (OR TOTAL ADMISSIONS).

IT PROVIDES A MEASURE OF HOW MANY DAYS A PATIENT, ON AVERAGE, SPENDS IN THIS HOSPITAL.

IT IS AN INDICATOR OF SEVERITY OF ILLNESS.

IT INDICATES THE AVERAGE INPATIENT RESOURCES USED FOR SPECIFIC CATEGORIES OF PATIENTS.

OCCUPANCY RATE

OCCUPANCY RATE IS DERIVED BY DIVIDING THE AVERAGE DAILY CENSUS BY THE AVERAGE NUMBER OF BEDS (CAPACITY) DURING A GIVEN PERIOD OF TIME. IT IS EXPRESSED AS A PERCENTAGE.

ADMISSION: A patient who is provided with room, board, continuous nursing service, and other institutional services for at least one overnight stay.

ADULT LIVING FACILITY: A facility offering housing, food service and personal services such as assistance with eating, bathing, grooming, dressing, and supervision of self-administered medication.

ANCILLARY CARE SERVICES: Diagnostic or therapeutic services performed by non-nursing departments. These include, but are not limited to, surgery, laboratory, radiology, pharmacy, and physical therapy.

AVAILABLE BEDS: Beds staffed and ready for use. Does not include beds in labor rooms, bassinets, postoperative recovery rooms, outpatient residences and other areas utilized for only a portion of a patient’s stay.

CAPITATION: A method of payment for health services in which a provider is paid a fixed amount per month for each person served, regardless of the number or type of actual services provided to each person.

ABUSE: Any incident or practice of a provider, physician, or supplier which, although not usually considered fraudulent, is inconsistent with accepted and sound medical, business, or fiscal practices and directly or indirectly results in unnecessary costs to the Medicare program, improper reimbursement, or program reimbursement for services that fail to meet professionally recognized standards of care or, in some cases, may be medically unnecessary.

AMBULATORY SURGICAL CENTER (ASC): A facility that operates exclusively for the purpose of providing outpatient surgery services to patients

ASSIGNMENT: A process in which a Medicare beneficiary agrees to have Medicare’s share of the cost of a service paid directly to the provider. The provider agrees to accept the Medicare approved charges as payment in full.

DEDUCTIBLE: Amount that must be paid by an insured person before an insurance plan pays any portion of the associated costs.

ENTITLEMENT: Refers to a Medicare beneficiary who can receive benefits under the Medicare program (e.g., the date of entitlement begins at age 65 for most beneficiaries).

ACCESS: A person’s ability to obtain affordable medical care on a timely basis.

AMBULATORY CARE FACILITY (ACF): A medical care center tht provides a wide range of healthcare services, including preventive care, acute care, surgery, and outpatient care, in a centralized facility. Also known as a medical clinic or medical center.

AT-RISK: Term used to describe a provider organization that bears the insurance risk associated with the healthcare it provides.

CASE MANAGEMENT: A process of identifying plan members with special healthcare needs, developing a health-care strategy that meets those needs, and coordinating and monitoring the care, with the ultimate goal of achieving the optimum healthcare outcome in an efficient and cost-effective manner. Also known as large case management (LCM).

BALANCED BUDGET ACT: The Balanced Budget Act of 1997 makes numerous changes to the various titles of the Social Security Act and includes several anti-fraud and abuse provisions and improvements in protecting program integrity.

TYPES OF HOSPITALS

ACUTE CARE: NON-FEDERAL SHORT-TERM MEDICAL/SURGICAL HOSPITAL. ALSO CALLED “COMMUNITY” HOSPITAL OR “GENERAL MEDICAL/SURGICAL HOSPITAL.”

FEDERAL: CONTROLLED BY A DEPARTMENT OF THE FEDERAL GOVERNMENT, SUCH AS, VETERAN'S ADMINISTRATION, U.S. NAVY, U.S. ARMY, AND OTHERS.

INVESTOR-OWNED: OWNED AND OPERATED BYA CORPORATION OR AN INDIVIDUAL AND THAT OPERATES ON A FOR-PROFIT BASIS.

LONG-TERM: A HOSPITAL IN WHICH THE AVERAGE LENGTH OF STAY EXCEEDS 30 DAYS.

NOT-FOR-PROFIT: A GENERAL ACUTE CARE, NON-TAXABLE HOSPITAL THAT OPERATES ON A NOT-FOR-PROFIT BASIS UNDER THE OWNERSHIP AND CONTROL OF A PRIVATE CORPORATION.

PSYCHIATRIC: PROVIDES DIAGNOSTIC AND TREATMENT SERVICES TO PATIENTS WITH EMOTIONAL, MENTAL, OR SUBSTANCE ABUSE DISORDERS.

REHABILITATION: SPECIALIZES IN PROVIDING RESTORATIVE SERVICES TO REHABILITATE THE CHRONICALLY ILL AND DISABLED INDIVIDUALS TO A MAXIMUM LEVEL OF FUNCTIONING

RURAL: MEDICARE DEFINES “RURAL” AS A HOSPITAL LOCATED IN A NON-METROPOLITAN AREA. FOR ALL PURPOSES OTHER THAN MEDICARE, “RURAL” IS DEFINED BY STATE STATUTE.

SHORT-TERM: A HOSPITAL IN WHICH THE AVERAGE LENGTH OF STAY IS LESS THAN 30 DAYS.

SPECIALTY: PROVIDES MEDICAL SERVICES TO A DESIGNATED GROUP OF INDIVIDUALS WITHIN 23 RECOGNIZED AREAS OF EXPERTISE. SOME SPECIALITY HOSPITALS CAN BE CLASSIFIED AS “ACUTE CARE” IF SURGICAL SERVICES ARE PROVIDED.

TEACHING: VARIES FROM STATE TO STATE BUT IN FLORIDA, MUST BE AFFILIATED WITH AN ACCREDITED MEDICAL SCHOOL, AND MUST HAVE AT LEAST SEVEN DIFFERENT RESIDENT PHYSICIAN SPECIALITIES AND 100 OR MORE RESIDENTS.

URBAN: HOSPITALS LOCATED IN METROPOLITAN STATISTICAL AREAS.

MORE TECHNICAL TERMS

BAD DEBT: PATIENT CHARGES THAT ARE UNCOLLECTIBLE. A HEALTH CARE PROVIDER MAY ABSORB THE COST OF BAD DEBT BY INCREASING CHARGES FOR OTHER PATIENTS. (COST SHIFTING)

BASSINET: CRIB FOR NEWBORNS NOT INCLUDED IN THE BED COUNT. COUNTED AS BED IF NEWBORN ADMITTED WITH A DIAGNOSIS.

CERTIFICATE OF NEED (CON): APPROVAL GRANTED BY THE STATE TO ADD NEW FACILITIES, TERTIARY SERVICES, OR TO BUY MAJOR EQUIPMENT. HOSPITALS, NURSING HOMES, AMBULATORY SURGICAL CENTERS AND HOME CARE AGENCIES MUST COMPLY WITH CON REGULATIONS.

COST SHIFTING: THE PRACTICE OF CHARGING HIGHER PRICES TO CERTAIN GROUPS OF HEALTH CARE PURCHASERS TO COVER THE COST OF UNCOMPENSATED CARE AND SHORTFALLS IN PAYMENT FROM GOVERNMENT PAYERS.

DIAGNOSIS RELATED GROUP (DRG): PATIENTS WITH THE SAME DIAGNOSIS, THE SAME PROCEDURES, AND WITH SIMILAR CHARACTERISTICS, SUCH AS AGE AND PRESENCE OF OTHER SICKNESSES AND COMPLICATIONS. MEDICARE REIMBURSES ACUTE CARE HOSPITALS BY ASSIGNING SPECIFIC PAYMENTS TO EACH “DRG.”

DISPROPORTIONATE SHARE HOSPITAL (DSH): A HOSPITAL THAT SERVES A RELATIVELY LARGE VOLUME OF LOW-INCOME PATIENTS. THESE HOSPITALS RECEIVE AN ADDITIONAL PAYMENT AMOUNT UNDER THE MEDICARE PROGRAM.

DRG PAYMENT: THE “DRG” PAYMENT IS COMPRISED OF TWO PARTS – A LABOR AMOUNT AND A STANDARD AMOUNT.

THE LABOR AMOUNT REFLECTS THE COST OF EMPLOYEES NEEDED TO CARE FOR THE PATIENT.

STANDARD AMOUNT INCLUDES THE COST OF SUPPLIES, DRUGS, AND OTHER EXPENSES.

THE AMOUNTS DIFFER FOR HOSPITALS LOCATED IN DIFFERENT AREAS AND ARE UPDATED ONCE A YEAR.

FULL-TIME EQUIVALENT (FTE): A MEASUREMENT OF PERSONNEL IN TERMS OF LABOR. FTES ARE BASED ON A 40-HOUR WORKWEEK OR 80 HOURS EVERY TWO WEEKS AND INCORPORATE THE NUMBER OF FULL TIME AND PART TIME EMPLOYEES.

GROSS PATIENT REVENUE: THE AMOUNT CHARGED TO INPATIENTS AND OUTPATIENTS.

THIS IS NOT WHAT THE HOSPITAL WAS PAID.

NET PATIENT REVENUE: THIS REFLECTS THE PAYMENTS THAT HOSPITALS RECEIVE FOR CARING FOR THE PATIENTS.

HIGH MEDICARE HOSPITAL: A HOSPITAL THAT TREATS A DISPROPORTIONATELY HIGH SHARE OF MEDICARE PATIENTS, OR 65% OF PATIENT DAYS ARE ATTRIBUTED TO MEDICARE BENEFICIARIES.

HILL-BURTON PROGRAM: FEDERAL PROGRAM CREATED IN 1946 TO PROVIDE FUNDING FOR THE CONSTRUCTION AND MODERNIZATION OF HEALTH CARE FACILITIES. HOSPITALS THAT RECEIVE HILL-BURTON FUNDS MUST PROVIDE SPECIFIC LEVELS OF CHARITY CARE.

INTERMEDIATE CARE FACILITY (ICF): A FACILITY WHICH HAS SIX OR FEWER BEDS AND PROVIDES HEALTH-RELATED CARE ON A REGULAR BASIS TO PATIENTS REQUIRING A LESSER DEGREE OF CARE THAN THEN THE HOSPITAL PROVIDES, BUT BECAUSE OF A PHYSICAL OR MENTAL CONDITION, REQUIRES MORE THAN ROOM AND BOARD.

HCA HEALTHCARE…ONE OF THE REALLY BIG CORPORATIONS

HCA – THE HEALTHCARE COMPANY

OWNS AND OPERATES APPROXIMATELY 200 HOSPITALS AND OTHER HEALTHCARE FACILITIES IN 24 STATES, ENGLAND, AND SWITZERLAND.

THE COMPANY EMPLOYS 168,000 PEOPLE.

PRIDES ITSELF ON THE FACT THAT MANY OF THE HOSPITALS IN ITS CORPORATION HAVE ACHIEVED THE HIGHEST QUALITY RATING FROM THE JOINT COMMISSION ON ACCREDITATION OF HEALTHCARE ORGANIZATIONS.

PROMOTES THE CORPORATION AS BEING “LOCALLY MANAGED” BY HOMETOWN PEOPLE WHO SHARE THE VALUES OF THE COMMUNITY.

FEELS VERY STRONGLY THAT THE COMPANY HAS BEEN ABLE TO CONTROL COSTS IN A NUMBER OF WAYS, VOLUME PURCHASING, SHARED ADMINISTRATIVE COSTS, AND WORKING WITH PHYSICIANS AND CAREGIVERS TO IMPROVE QUALITY.

HAS BEEN THE TARGET OF A WIDE-RANGING GOVERNMENT INVESTIGATION THAT LED TO UNPRECEDENTED TURNOVER IN SENIOR MANAGEMENT.

CHANGED THE NAME OF THE COMPANY FROM COLUMBIA, HCA TO HCA HEALTH CARE.

HAS PLACED THE RESPONSIBILITY OF MANAGEMENT MORE ON THE LOCAL CEO.

HAS DEFINED A NEW SET OF OBJECTIVES FOR THE COMPANY.

INCREASE UTILIZATION OF FACILITIES

ASSURE ALL HOSPITALS PROMOTE A CULTURE AIMED AT PROVIDING A LEVEL OF QUALITY AND SERVICE WHICH ROUTINELY EXCEEDS THE EXPECTATION OF THEIR PATIENTS AND PHYSICIANS.

COST MANAGEMENT

MANAGE SALARY, WAGE, AND BENEFITS COST IN ACCORDANCE WITH CHANGING LEVELS OF NET REVENUE.

COMPLIANCE

NEGOTIATE AND SETTLE ALL PAST ISSUES WITH THE FEDERAL AND VARIOUS STATE GOVERNMENTS.

MANAGED CARE CONTRACTING

CREATE A GROUP – AND DIVISION-BASED MANAGED CARE CONSULTING AND EDUCATIONAL ARM WHICH SUPPORTS LOCAL OPERATORS IN MODELING, NEGOTIATING, AND ADMINISTERING MANAGED CARE CONTRACTS.

PHYSICIAN PRACTICE MANAGEMENT

IMPROVE THE UP-FRONT PROCESSES INVOLVED IN PURCHASING PRACTICES AND EMPLOYING PHYSICIANS.

HUMAN RESOURCES AND LEADERSHIP

REDUCE TURNOVER AND INCREASE LONGEVITY OF THE SENIOR MANAGEMENT TEAMS IN OUR HOSPITALS, PARTICULARLY THE CEO’S, TO PROVIDE STABILITY AND A LONGER TERM FOCUS.

THE EFFECT OF THE BALANCED BUDGET ACT OF 1997 ON HCA

HEALTHCARE

SINCE BBA TOOK EFFECT ON OCTOBER 1, 1997, THE COMPANY HAS EXPERIENCED PAYMENT REDUCTIONS FROM MEDICARE IN EXCESS OF ONE-HALF BILLION DOLLARS.

IN 1998, THE FEDERAL GOVERNMENT PAID 300 MILLION DOLLARS LESS THAN THE PREVIOUS YEAR. AT THE SAME TIME, HCA HEALTHCARE WAS EXPANDING SERVICES TO MEDICARE PATIENTS.

THE GOVERNMENT PROJECTED THAT THE BALANCED BUDGET ACT WOULD REDUCE FEDERAL HEALTH SPENDING BY $100 BILLION OVER FIVE YEARS.

RECENT PROJECTIONS CALCULATE THE BBA’S IMPACT AS MORE THAN $225 BILLION OVER ITS FIVE YEAR LIFE.

End lecture of October 3rd, 2011

6th Period

Questions?