Hospitals: History and Organization

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Hospital History
• Overview • Pennsylvania Hospital (1751)
– Oldest voluntary hospital

• Focus on sick, poor, homeless • Not a focus of care for physicians – Primary care in home/office

• Mental illness
– First mental hospital in 1772
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Hospital History (cont.)
• Growth of urban areas
– Growth of hospitals – Focus on research, teaching, medical schools

• Major discoveries
– Anesthesia
• Ether

• Antibiotics
• Sulfa Drugs, penicillin (decreased infection rates and mortality)

• Ambulatory/outpatient care • Transplants (kidney 1954, liver/heart 1967) • Hill Burton (1948) – Commitment to the poor in return for federal funding for building assets 2

Hospitals - Statistics
• Number in the US = 4,908 • Types: – Community (non federal, short term, specialty) = 4,919 – For-profit (investor owned) = 754 – Non-profit = 2,998 – Government = 1,156 • Statistics – Beds = 826,000 – Beds staffed = 808,127 3

Hospitals – Statistics (cont.)
– – – – – – – – – – Total admissions = 36,941,951 Spending per capita = $5,276 40+ million people without health insurance coverage Total Expenses = $445,700,000,000 Admissions = 33,814,000 Average length of stay = 5.7 days Cost per day = $1,217 Outpatient surgeries as a percent of total = 63% Outpatient Visits = 539,316,000 Annual change in health insurance premiums = 13.9% 4

Hospitals – Trends
• • • • Decrease in the number of hospitals Decrease in inpatient admissions Increase in outpatient visits Average length of stay, patient days, and number of hospital inpatient beds all have decreased • Changes in expansion/growth strategies • Changes in affiliations, increase in systems • Increase in health care costs for providers, consumers, government, insurance industry 5

Hospital Organization
Typical Structures

• Hierarchical form
– Senior Management (CEO, COO, CFO, CNO) – Middle Management (Division and Department Heads) – Supervisors (Managers, Assistant Directors, Charge Nurse) – Staff, line staff • Matrix (oriented towards problem solving and managing projects) authority can rest with the project manager versus a department head or CEO.

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Hospital Organization
Typical Structures (cont.) • Product Line/strategic business units (example: women services, surgical services, or rehabilitation services) • Networks/Affiliations/Alliances – VHA (Voluntary Hospitals of America) • Individual autonomy with some advantages from the economics (purchasing, managed care negotiations) side. Potential legal (antitrust) issues.

• Multi-Hospital System
– HCA, Tenet, Lifepoint, HMA, CHS • Managed, leased or owned by single entity • Economies of scale, managed care, purchasing and access to capital dollars.

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Three Major Powers Within The Hospital Structure • Governing Board • Management Staff • Medical Staff – All are governed by the organizations By-laws which outline responsibilities, relationships etc. – All affect each other

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Governing Board - Overview
• Governing Board (size varies, range from of 9 to 25 members with the average at 17) • Makeup should be representative of the community and hospital and include: – Business leaders (designed “capacities”) – Management – Medical Staff – Community representatives • Term limits 2 to 3 years

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Governing Board (Overview - cont.)
• Typical Board Committees (structure)
– Executive committee
• Select key members of larger board • May be chairpersons of the executive, finance, planning committees (for example) • Discuss and recommend actions on significant issues (legal, financial, strategic etc.)

– Finance committee
• Review and monitor financial performance and services at the hospital

– Planning committee
• • • • Annual strategic planning work group Review progress on goals Modification to plan as needed New services, expansion 10

Governing Board (Overview cont.)
• Statement of authority
– Articles of Incorporation or charter and By-Laws
• The Articles of Incorporation, or...
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