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3 Evolving Health Care Scene
Pages 42-67

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From page 42...
... A combination of changes in payment policies and technological and scientific advances has permitted shifts from the traditional inpatient hospital setting to ambulatory care settings, the community, home, and nursing homes. Hospitals increasingly are offering nontraditional services including hospital-based ambulatory care, home health care, and skilled nursing services units (AMA, 1994a)
From page 43...
... Subacute care is offered in many nursing facilities for patients discharged from the hospital to the nursing facility (AHCA, 1995~. Impetus for Cost Containment Enactment of Medicare and Medicaid in 1965 began a period of tremendous growth in health care services, especially hospital services.
From page 44...
... However, hospital staffing levels began to rise again in 1986 (see Figure 3.1~. A possible explanation for the staffing increase is a combination of scientific and technological advances and an increasing proportion of hospitalized patients tending to be more critically ill requiring more intensive inpatient hospital care and skilled and specialty services, including nursing services (HRSA, 1993~.
From page 45...
... Focus of the Chapter This chapter presents a brief overview of the major changes occurring on the health care scene, with a focus on the hospital and nursing home sectors, and what these shifts mean for the organization and delivery of nursing services to 2The term "managed care" as used in this report is broadly understood to encompass organized efforts by third parties, such as health plans, to influence the access, use, and cost of services provided to patients by care givers.
From page 46...
... PRIVATE INSURANCE AND PUBLIC PAYERS FOR HEALTH CARE Health care in the United States is financed primarily through a combination of private health insurance and public coverage, and historically has been pro3For a detailed discussion of the changing health care delivery environment and the evolution of managed care, see ProPAC (1994) , Chapter 3; Shortell et al., 1995; Shortell and Hull, in press.
From page 47...
... Although public efforts at reforming health insurance have not progressed, the private health insurance sector continues to experience rapid change as it responds to cost pressures from employers. This has led to greater competition in the market and shifts by employers and other purchasers of health care from some insurance companies to other companies, leading to some instabilities in the market.
From page 48...
... found that in comparison to FFS indemnity plans, HMOs had generally lower hospital admission rates, shorter lengths of hospital stay, and fewer uses of hospital services. The studies also showed an average of 22 percent lower use of expensive procedures, tests, and treatments for which less costly alternative interventions were available.
From page 49...
... The survey also found a high rate of involuntary plan changing, limited choice of physicians, and low levels of satisfaction among low income managed care enrollees. These findings are based on a population-based survey conducted by the Commonwealth Fund in 1994 of about 3,000 adults insured in FFS plans and managed care organizations.
From page 50...
... Nursing facilities, like other segments of the health industry, are consolidating into large health care organizations, with the largest chain reporting more than 90,000 beds in 1991. Profit margins reported for the health care industry have generally been good (Burns, 1992; Abelson, 1993; Rudder, 19941.
From page 51...
... Medicare's share of funding for all hospital expenditures was 28 percent in 1993, the highest since the mid-1980s. In 1993, 61 percent of Medicare benefits were for hospital care (including inpatient, outpatient, and hospital-based home health care)
From page 52...
... The American Hospital Association (AMA) reported closures of 675 community hospitals between 1980 and 1993 6 Thirty-four of the closures occurred in 1993 (AMA, 1994b)
From page 53...
... They frequently convert inpatient capacity to other functions; only rarely does the acquired hospital continue acute care services after a merger (Bogue et al., 19951. Between 1980 and 1992, AHA reported 215 mergers involving 445 hospitals or health care systems (AMA, 1992~.7 The AHA recorded another 18 completed mergers in 1993 (AMA, 1994c)
From page 54...
... Several factors in addition to cost containment influence inpatient length of stay, including reimbursement incentives, technological advances, and increased availability of home health care. The number of staffed beds in U.S.
From page 55...
... The increased acuity of patients and the consequent complexity of inpatient hospital care and services require more specialized and intense nursing care than before. This is reflected in the increased use of special care units such as the intensive care units (ICU)
From page 56...
... ambulatory care settings, to post-acute service settings such as skilled nursing facilities, or to home health care and rehabilitation services. This shift has resulted in substantial growth in the use of and spending on, those areas.
From page 57...
... Hospital-Based Skilled Nursing Units Unoccupied hospital beds are being converted in some hospitals into postacute skilled nursing units, hospice units, and special care centers. Patients are
From page 58...
... Occupancy measures the demand for nursing facility services and is often used as an indicator of an undersupply of beds. The occupancy rate in nursing facilities has remained high.
From page 59...
... The kinds of services that are increasingly being provided in some nursing facilities are also creating a greater need for skilled nursing care, in particular, greater professional nursing involvement in the direct care of patients and in supervision, more clinical evaluation, and more financial and human resources. Several federal government policy changes in the 1980s have contributed to
From page 60...
... These policy changes have all encouraged the demand for nursing home services and, thereby, increased Medicaid and Medicare outlays for this type of care. Some states have also adopted policies to control Medicaid nursing home demand, including Medicaid eligibility policies and preadmission screening programs (Ellwood and Burwell, 1990; HCFA, 1992a,b; Harrington et al., 1994c)
From page 61...
... This provision, known as the Boren Amendment, allowed states to pay nursing facilities based upon what was "reasonable and adequate to meet the costs incurred by efficiently and economically operated nursing facilities in providing care." Since 1980, there has been a pronounced shift away from retrospective reimbursement to prospective facility-specific methods (Swan et al., 1993a,b; 1994~. In addition, the number of states with case-mix reimbursement has increased substantially (see Table 3.6~.
From page 62...
... Medicaid nursing home reimbursement methods are primarily prospective and vary substantially across states. These methods create wide variations in rates and have dramatic impact on nursing home expenditures and staffing (described in chapter 69.
From page 63...
... While the growth in licensed nursing facilities has hovered around 2 percent per year for the past several years, and only 1 percent between 1992 and 1993, the increase in residential care facilities, including board and care, personal care, foster care, and/or assisted living facilities, has been rapid. In 1993, there were 39,080 licensed residential care facilities for the aged with about 642,600 beds (Harrington et al., 1994b)
From page 64...
... Nursing homes and chains are also forming integrated networks of services with hospitals, physicians, subacute care providers, home health care, and other relevant providers. Despite the recent movement toward consolidation within the industry, nursing home chains control only about 35 percent of the market and the 20 largest chains operate only 18 percent of the nursing home industry (lICIA and Arthur Andersen, 1994~.
From page 65...
... Subacute care is increasingly becoming acceptable as an alternative to cost-effective health care delivery model. Subacute care units of nursing facilities are emerging in response to the need to provide care to patients who suffer from medical conditions or are recovering from surgical procedures and require a broad range of medical and rehabilitative services.
From page 66...
... Redesign and reengineering have become principal strategies of the 1990s for many health care organizations. Institutional care hospitals and nursing homes and the personnel who provide the care are particularly affected.
From page 67...
... The rest of the population will increasingly receive care in outpatient units, home- and communitybased settings, assisted living facilities, and similar settings.


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