Hospitals
(part 1)
Objectives
• Review the history of the development of
hospitals in the U.S. health care system
• Learn of common hospital terms and
current hospital trends
• Discuss the various types of hospitals that
comprise the hospital industry
Hospitals
• An institution with at least
six beds providing
inpatient care
• Delivers diagnostic and
therapeutic patient
services
• Licensed
• Organized physician staff
• Continuous nursing
services under RN
supervision
• Designated governing
body or board
• Full-time chief executive
officer (CEO)
• Maintain medical records
• Pharmacy services
• Food services
• Meet building, fire
protection, and sanitation
standards
Common Hospital Terms
• Inpatient = patient staying overnight in facility
• Discharges = total number of patients released from
a hospital’s acute care beds during a given period
• Inpatient day = night spent in the hospital by a
patient (i.e., patient day, hospital day)
• Average length of stay (ALOS) = average number of
days patients spend in the hospital
• Days of care = total number of inpatient days
incurred by a population over a given period
Common Hospital Terms
•
•
•
•
Capacity = number of set up & staffed beds
Census = number of patients in hospital that day
Patient days = cumulative census
Average daily census (ADC) = average census over
a given period of time
• Occupancy rate = percentage of capacity used
during a given period of time
The History of U.S. Hospitals
• Evolved from almshouses & pesthouses
• Evolved from government-run to community
institutions supported through charitable donations
• Evolved with medical discoveries
– Anesthesia, sterilization, antiseptics, diagnostic technology
• Hospitals provided physicians with practical training
and access to technology, becoming a necessity
and attracting private payers (generating a profit)
The History of U.S. Hospitals
• Most hospitals in the late 19th and early 20th
century functioned as almshouses and
pesthouses.
– Places for the poor
– Funded by private charity
– Those who had money could afford to die at home.
• As medical science advanced the hospital came
to the center of medical care
• Hill Burton Act of 1946 provided funding to
refurbish old hospitals and to build new hospitals
The History of U.S. Hospitals
• The increased prevalence of health insurance in
the 1950s resulted in an increase in demand for
hospital services
• Creation of Medicare & Medicaid increased
demand
• Period of downsizing
– Introduction of Prospective Payment Systems
– Growth of managed care
Hospitals by Type by Year
1975
1990
2000
2010
Change
7,156
6,649
5,810
5,754
-20%
Federal
382
337
245
213
-44%
Private Nonprofit
3,339
3,191
3,003
2,904
-13%
For Profit
775
749
749
1,013
31%
State-Local Govt
1,761
1,444
1,163
1,068
-39%
All Hospitals
Hospital Beds by Type By year (in 1,000)
1975
1990
2000
2010
Change
1,466
1,213
983
942
-36%
Federal
132
98
53
45
-66%
Private Nonprofit
658
657
583
556
-16%
For Profit
73
101
110
125
71%
State-Local Govt
210
169
131
125
-40%
All Hospitals
Occupancy
1975
1990
2000
2010
76.7
69.5
66.1
66.6
Federal
80.7
72.9
68.2
65.3
Private Nonprofit
77.5
69.3
65.5
66.2
For Profit
65.9
52.8
55.9
57.1
State-Local Govt
70.4
65.3
63.2
64.4
All Hospitals
U.S. Hospitals Today
• Ultramodern facilities providing high-tech services
• Hospitals often referred to as “medical centers”
– High levels of specialization, wide scope of services
– Many facilities affiliated with university-based medical
schools, promoting education and research
• Complex organizations
• Local market pressures prompting consolidation,
mergers & affiliations
– Development of multi-hospital systems & clusters
– Diversification & expansion of service offerings
• OP clinics, ASC, Imaging centers, Home care, Fitness & wellness
– Aim to acquire power in local markets
Hospital Trends
• Hospital ALOS on the decline
– PPS encouraging “quicker and sicker” discharges
– Managed care limiting hospital stays
– Growth of alternative services
• Movement to outpatient settings
• 84% of U.S. community hospitals have less than
300 beds
– Rural hospitals average 65 beds; urban hospitals 231
• 5.7 million hospital employees (40% of health care
workforce, 4% of employed civilians)
– Current trend is to downsize employment
– Average hourly earnings highest among healthcare sites
Issues Affecting Hospitals
• Technology
– Efficiency, legitimacy, expenses
• Quality & accountability
– Outcomes, legitimacy, expenses, transparency
– Between 44,000 and 98,000 people die in US hospitals each year because of
preventative medical errors (IOM)
• Health systems & health networks
– Consolidation & “clusters”
– Health systems: arrangement among hospitals, physicians, and other provider
organizations that involve direct ownership of assets on the part of the parent
system
– Health network: strategic alliance that involves contractual arrangements among
hospitals, physicians, and other health services organizations
– Integration: vertical & horizontal
– Improves efficiency, competitive position, bargaining position, and market
coverage
Types of Hospitals
• Community hospitals
• Public hospitals
• Private hospitals
– Nonprofit
– For-profit
• Rural hospitals
• Teaching hospitals
• General hospitals
• Specialty hospitals
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–
–
–
–
–
Psychiatric
Rehabilitation
Children’s
Cardiac
Surgical
Orthopedic
Community Hospitals
• Nonfederal, short-stay hospitals whose
services are available to the general public
– Excludes federal hospitals (e.g., VA, prisons)
– Excludes long-stay hospitals (e.g., psychiatric
facilities, chronic disease hospitals)
• Can be private or can be operated by local
and state governments
• Can be general or specialty hospitals
• ALOS must be 30 days or fewer
Public Hospitals
• Hospitals owned by agencies of federal,
state, or local governments
• 19% of U.S. hospital bed capacity
• Not necessarily open to the general public
Private Nonprofit Hospitals
• Also called voluntary hospitals
• 60% of U.S. hospital beds & most multi-hospital systems
• Operated by community associations, philanthropic
foundations, fraternal orders, etc.
– Donations & endowments help cover expenses in addition to
patient fees & third-party reimbursements
• Religious-affiliated groups play a significant role in
operating multi-hospital systems (e.g., Catholic,
Protestant, Jewish)
– History of caring for communities, observing religious practices
– Do not discriminate access to care but are sensitive to spiritual
needs of sponsoring denomination
Private For-Profit Hospitals
• Also called proprietary or investor-owned hospitals
• Owned by individuals, partnerships, or corporations
– Operated for financial benefit & investment return to stockholders
– Achieves goal by providing high quality care at reasonable price
• Some of the largest multi-hospital chains are private forprofit systems (e.g., HCA, Tenet, CHS)
– Originally flourished at beginning of 20th century as physicians
established small hospitals to hospitalize their patients
– Many freestanding proprietary hospitals closed or were acquired
– Current trend of increased building or acquisition of hospitals by
large investor-owned corporations
General vs. Specialty Hospitals
• General hospitals
– Provide diagnostic, treatment, and surgical services for patients
with a variety of acute medical conditions
– Many hospitals in the U.S. are general hospitals
– Provide a broader range of services for a larger variety of
conditions as opposed to specialty hospitals
• Specialty hospitals
– Admit only certain types of patients or those with specific
illnesses or conditions
– Increasing competition has fueled the growth of specialty
hospitals that provide treatments available in many general
hospitals
– Psychiatric, rehabilitation, children’s, cardiac, surgical, etc.
Psychiatric Hospitals
• Provide diagnostic and treatment services
for patients who have psychiatric illness
– Psychiatric services
– Psychological services
– Social work services
• Must have written agreement with a
general hospital for the transfer of patients
requiring medical, obstetric, or surgical
care
Rehabilitation Hospitals
• Provide therapeutic & rehabilitative services to
restore maximum level of functioning to patients
suffering recent disability due to illness or accident
• Stroke, spinal cord injury, traumatic brain injury
(TBI), debility, amputation, joint replacement, hip
fracture
• Patients often transferred from general acute care
facilities
• Length-of-stay averages approximately 2 weeks
• Physical, occupational, & speech therapy
Children’s Hospitals
• Special facilities and trained staff deal with unique
medical problems of children
– 75% of inpatients are treated for chronic and congenital
conditions
– The remainder often require intensive care for conditions such
as cystic fibrosis, cancer, transplant, etc.
• Account for less than 4% of all U.S. hospitals but provide
vast majority of highly specialized care for children
• Equipment and furnishings specially designed for
children
Rural Hospitals
• Located in a county that is not part of a
metropolitan statistical area (MSA)
– MSA = Geographical area including at least one
city with population greater than 50,000 or
urbanized area with population of 50,000 and
total MSA population of over 100,000
• Treat larger percentage of poor and elderly
patients
• Face financial troubles, threat of closure
– Critical access designation
Teaching Hospitals
• Offers one or more graduate residency programs
approved by the AMA
• Primary role of training physicians
• Major and minor teaching institutions
– Depends upon number and type of residency programs offered
•
•
•
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Most affiliated with medical schools of large universities
Substantial teaching and research activities
Cutting edge of medicine & technology
Often deliver specialized care for complex problems,
including unique tertiary care services
– Burn care, trauma care, organ transplantation
• Often serve disproportionate share of poor population
What We’ve Learned
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•
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Review of hospitals’ history
Common hospital terms
Current trends in hospitals
Types of hospitals & examples