Name the three main forces that have been responsible for hospital downsizing. How has each of these forces been responsible for the decline in inpatient hospital utilization?
• Changes in Reimbursement- Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982 required the conversion of hospital Medicare reimbursement from cost-plus to a prospective payment system (PPS). Under PPS, hospitals are paid a fixed amount per admission according to the patient's principal diagnosis - regardless of length of stay. To make a profit, hospitals must keep costs below the fixed reimbursement amount, which creates, and incentive to minimize length of stay. In 1980s, 550 hospitals closed & 159 mergers and acquisitions occurred.
• Impact of Managed Care- Managed care in the 1990s became a growing force transforming the delivery of health services. Like we talk about last class, inpatient care is expensive, so
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11.) What are some of the differences between private nonprofit and for-profit hospitals?
• Private nonprofit hospitals are owned and operated by community associations or other nongovernment organizations. Nonprofit hospitals main goal is to benefit the community in which they are located.
• For-profit hospitals are owned by individuals, partnerships, or corporations. Profit hospitals are operated for the financial benefit of the entity that owns the institution, that is, the stockholders.
14.) Why have physicians developed their own specialty hospitals? What legal issues can arise when physicians have an ownership interest in a hospital?
• Physicians find specialized hospitals more efficient, and in many instances, physicians are full or part owners of these hospitals. Such hospitals gives physicians control over hospitals operations, flexibility with their time, and opportunity to enhanced their