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healthcare systems final 2


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IOM Definition of Health Care Quality
The degree to which health care services to individuals and populations increase the likelihood of desired health and are consistent with current professional knowledge
characteristics of quality healthcare
the failure of a planned action to be completed as intended or the use of a wrong plan to achieve an aim
Adverse event
injury caused by medical management rather than the underlying condition of the patient. An adverse event attributable to error is a “preventable adverse event”
rank of death due to medical errors
4th leading cause, under cancer, heart disease,
most common cause
drug iatrogenesis
what is the % of adverse events with prolonged hospitalizations
VA study
22.7% of deaths found to be possibly preventable by optimal care
problems with VA study?
majority male, smaller, sicker population sample
most common number reported regarding preventable deaths
what is effective healthcare
Providing services based upon scientific knowledge to all who could benefit and not providing services to those not likely to benefit (avoiding underuse and overuse)
Requires evidence-based practice
pt centered healthcare
care that is respectful and responsive to individual patient preferences, needs and ensuring that patient values guide all clinical decisions
what is IOM recommendation for timely healthcare?
access 24hours/7days a week
equitable healthcare
Providing care that does not vary in in quality because of personal characteristics such as gender, ethnicity, geographic location and socioeconomic status
individual level of equitable care
Individual level:care based upon need not individual characteristics
how many American's are without health insurance
44 million, 47.5% of working-class uninsured
Avedis Donabedian dimensions of quality
1. structure
-bed size, board cert, # of procedures
2. Process
- # of mammorgrams, pap smears, VBAC's
3. outcome
-mortality rates and pt satisfction scores
tools to improve quality
Disease Management
Evidence-based Medicine
Practice Guidelines
Clinical Pathways
Report Cards
quality equation
pt satisfction + outcomes = cost
what is managed care
Organized effort by health insurance plans and providers to use financial incentives and organizational arrangements to alter provider and patient behavior so that health care services are delivered in a more efficient and lower cost manner
extent of managed care
An estimated 85% of Americans received health care through some type of managed care by the year 2000
history of mangaed care
1929 – Elk City, OK, rural farmers cooperative
1934 – Ross and Loos developed prepaid health care for water company employees of Los Angeles
1937 – Group Health Association (Washington, DC)
1942 – Kaiser Permanente (Vancouver, WA; Walnut Creek, CA)
1945 – Kaiser Permanente opened enrollment to the public
1947 – Group Health Cooperative of Puget Sound – first group practice cooperative with citizen oversight
1954 – San Joaquin County Foundation (Stockton, CA): prototype independent provider association (IPA)
Managed Care Principles
Physicians accept financial risk, this represents a radical departure from fee-for-service

Prospective Payment vs. Retrospective Payment
Providers manage health care for an enrolled population not just individual patients

Preventing injury and disease is financially beneficial,though limited by short periods of enrollment
Specified amount paid periodically to a health provider for a group of specified health services regardless of quantity rendered
Amounts are determined by assessing a payment “per covered life” or per member
Shift of financial risk from insurer to provider
Costs of referrals and ancillary services
Quality of care/pt. satisfaction
Controlling Risk Under Capitation
Type of service (preventive care)
Diagnosis (AIDS)
Referral specialty (Ophthalmology
Keys to Success Under Managed Care
Keep patients out of the hospital

Keep patients out of the emergency room

Keep patients away from specialists
Types of Managed Care Organizations
Staff model HMOs (Group Health of Puget Sound)
HMO employs the physicians and PAs

Group model HMOs (Kaiser Permanente)
The HMO contracts with a multi-specialty physician group practice to provide all physician and PA services to the HMO’s members
Network Model HMOs (Health Insurance Plan of Greater New York)
The HMO contracts with more than one group practice to provide physician services to the HMO’s members

Independent Practice Association (IPA)
Independent physicians join to form a group which contracts with HMOs. Most common model
what models are more likely to use PAs?
Group and staff-model HMOs are more likely to use PAs and NPs to deliver part of primary care to their members than IPAs or PPOs. (86% of HMOs employ PAs or NPs)
Types of Managed Care Orgs
Point-of-Service Plans
Preferred Provider Organizations (PPOs)
Providers’ Views of Managed Care
Perceived loss of autonomy is an emotionally-charged issue.
what is the size and scope of cost of healthcare in America
1.6 Trillion dollars
$4,100 per capita
Currently 14% of GNP up from 6.3% in 1965
International Comparisons
Germany - 10.7%
Switzerland - 10%
France - 9.6%
Canada - 9.2%
Japan 7.2%
UK – 6.8%
History of Health Insurance
Originated in Europe early 1800’s.
Primary function was to protect against loss of income.
In 1911 policies began to be issued to cover health care costs.
1929 first hospital policies involving school teachers and Baylor University Hospital in Dallas. This was the beginning of Blue Cross.
Moral Hazard
Health insurance is highly discretionary
Individuals who purchase health insurance are more likely to use health services than if they were uninsured
Requires the use of disincentives to control utilization i.e. copayments and deductibles
Distribution of Health Care Costs
In any given year
20% incur no health care costs at all
70% of pop. incurs 10% of total costs
1% of the pop. incurs 30% of total costs
Deductible: payment before insurance benefits kick-in

Co-payment: out-of-pocket expense each time health services are received

Stop-loss: maximum out-of-pocket liability

Premium: employee pays a portion of the health insurance premium
Managing Risk
Community rating: premium based upon utilization in a defined geographic area. Healthy people subsidize the costs for the unhealthy, leads to adverse selection.
Experience rating: premium based upon demographic characteristics and/or actual group experience.
The Blues
Blue Shield- Started in 1939 by California physician group to pay for physician services
Size and Scope of healthcare workforce
11 million people, 10% 0f the U.S. work force are employed in health care
Over 200 health care occupations and professions
Bureau of Labor Statistics estimates that half of the 10 fastest growing occupations will be in health care
Allied Health Professionals
Physical Therapist
Occupational Therapist
Speech Therapist
Respiratory Therapist
Radiation Therapist
Initially built as isolation houses and quarantine stations

Served a social welfare function housing the mentally ill, homeless, infected patients and petty criminals
Evolution of the American Hospital
1736- Poor House of New York became Bellevue Hospital
1752- Pennsylvania Hospital became the first voluntary hospital designated to care for the sick
1789- the Public Hospital of Baltimore for the poor, sick and suffering of Maryland was founded, in 1889 became JHH
1809- St. Vincent de Paul Sisters of Charity began to establish hospitals around the country
Forces Affecting the Development of Hospitals
Advances in medical science
Proliferation of technology and specialization
Development of professional nursing
Teaching and research required to train MDs
Growth of health insurance
Forces Affecting the Development of Hospitals 2
Introduction of anesthesia
Laboratories and x-rays late 1800s
Florence Nightingale introduced the science of nursing during the Crimean War 1850s which moved into US during the Civil War
Flexner Report 1910
organization of hospital tier
board of trustees
senior vp,
controller,vp nursing,professional, support
-bzi off, er, hosp units, or, radiology, lab, pharm, amb, cardio, neuro,
VP nursing includes
ER, hosp units, OR
senior VP operations tiers
vp nursing
vp professional servs
VP support servs
VP professional services tier
radiology, labs, pharm, ambulatory,cardio,neuro
VP support services tier
Senior VP finance tier
biz office
Hospital Beds and Occupancy
1975 =
Beds 1,465,828
Occupancy 76.7%
1998 =
Resident Duty Hours-ACGME
Maximum of 80 hours per week
One day off out of seven
Call every third night
Work day limited to 24/30 hours
10 hours off between shifts

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