Service Line Development: National Trends, Policy, and Legislation - Term Paper Example

? SERVICE LINE DEVELOPMENT: National Trends, Policy and Legislation Prepared by: Part The trends identified in the case are that the percentage of Trinity Hospital’s customers using Medicaid and Medicare has increased over the past three years while there has been a decline in the percentage of those who are insured. The percentage has also increased for those patients who pay for themselves. In terms of Medicaid the percentage has increased from 12% two years previously to 16% in the current year. There was also an increase from 32% to 35% in relation to Medicare. The percentage of insured using the facility has declined from 50% to 41%. Self paying patients have increased from 5 to 8%. These changes have been accompanied by a reduction in revenue from $461.5 million to $427 million – a 7.5% decline. This decline has led to a decline in the hospital’s profit margin from $23.075 million to a negative of $1.495 million – a decline of 106.5%. This decline in revenue appears to have been initiated by the loss of the Obstetrics program and the erosion of general surgery volumes. The number of discharges, patient days, ADC, Surgeries, OP visits and ED visits. The only increase is related to ALOS which increased from 4.0 to 4.3. Zuckerman et al (2002) noted that mandatory health maintenance organizations (HMO) programs have had a positive impact on both adults and children and has resulted in less dependence on emergency room for medical care. There is an increase in the use of preventative care. Zuckerman et al (2002) also pointed to differences in access between people enrolled in Medicaid managed care and low-income privately insured people. This difference seems to have positively impacted the percentage of patients using Medicaid and Medicare while negatively impacting the percentage of patients using the facility who are insured. Gaynor and Haas-Wilson (1999, p. 141-142) indicate that three significant and interrelated changes took place in the health care industry in the late 1990’s. They are: ‘the rise in managed health care as a method of financing and delivering health care services; the horizontal consolidation within the insurance market, hospital services and physician service; and the blurring of distinctions between these markets.’ This seems to explain some of the trends noted at Trinity Community Hospital. The memos and telephone conversations seem to be pointing towards the legislative mindset of reducing payments to hospitals. There are also changes in how physicians are reimbursed and this has implications for health care in the county. However, although everyone is affected Robert Holland who is not directly employed in the health sector appears to be the only person who knows how to impact the legislative changes to the health care policy. There is an urgent need for improvement in health care policies and the suggestion made by Robert Holland to the CEO – Morgan Reece of working more closely with the Hospital Political Action Committee in order to frame feedback to the legislators is a good one. A member of the hospital board - Dr. Joint, who does not work at the Trinity Community Hospital is concerned that Congress wants to either reduce reimbursement or keep it at the same level while opening the doors of medical facilities to millions. Dr. Joint indicates that the payment to physician is not keeping up with cost increases and so the hospital will not be able to recruit any new doctors. This seems to have been the problem when the Obstetrics service was discontinued at the hospital. There is obviously a shortage of doctors which can have crippling effects on health services. This will also turn people away from public health facilities as they will prefer to pay more for private services in order to ensure that they receive quality health care. It therefore means that those who cannot afford private care are the only ones who will visit the hospital. Currently, only some basic provisions can be dealt with in relation to certain services that are offered at the facility. Trinity Hospital Board requires people who can lobby on the hospital’s behalf if the company is to move forward. Zetter (2008, p. 3) defines lobbying as ‘the process of seeking to influence government and its institutions by informing the public policy agenda. This Zetter (2008) states is ‘the art of political persuasion.’ Zetter (2008, p. ix) indicates that the core of lobbying is communication – ‘persuading decision-makers to hear and understand a different perspective or point of view.’ However, this requires an assessment of the local political culture. The right to Petition is deeply enshrined in the first amendment to the US constitution and lobbying has been used to influence the decisions of legislators who make decisions that affect the lives of the general population (Zetter 2008,p. ix to x). Attempts by the Hospital’s Political Action Committee should take place at various stages of the process. Zetter (2008) provides a number of reasons for this. They include the following: The reason for lobbying will determine the timing of the campaign and the resources that are allocated towards the effort; If the campaign is only about pure policy it is important for the committee to get involved at the start of the process and this will not require anyone who is trained in this area; However, if it requires a change in a bill then it will require lobbying specialists. The issues that the health profession faces may require the help of the media. Using the media to alter the perception of the public is recommended in some situations (Zetter 2008, p. 3). Part 2 Legislation arising from these trends will affect the services that Trinity Community Hospital Offers. The hospital is interested in offering oncology, orthopedic and cardiovascular services. However, the physicians required to perform those services may not be available. If Trinity is to achieve its mission of providing outstanding care for all of its patients, as well as becoming the premier provider of cancer and orthopedic and cardiovascular services then the board along with the Hospital committee needs to ensure that the current practice of reducing reimbursement to both hospitals and physicians cease. Trinity will only be able to compete if it can attract the necessary physicians to offer the services it wants to offer. The private hospitals that compete with Trinity Community Hospital offer cardiovascular, oncology and orthopedic services. However, there are obvious challenges in the area of oncology services. The cancer service at Tertiary Medical Center which is a 700-bed facility that is located ten miles away is poorly organized and is not accredited by ACOS. Regional hospital which is located seven miles away has the same issues as Tertiary Medical Center with its oncology services. However, Quaternary Medical Center which offers excellent oncology services is located 60 miles away and would not be considered a threat. This is a clear indication that Trinity Community Hospital could do well by focusing on oncology services. This is an area in which Trinity would like to differentiate its services from that of its competitors in order to gain the competitive advantage in an area where the service provided is relatively poor. However, in order to do so the organization needs to have highly qualified and experienced physician. This comes at a high price. Once the services are properly coordinated this should provide additional revenues that will hopefully reverse the declining trends in revenue and profit margins that the hospital experienced over the last two years. There are ongoing changes in legislation and the members of the board of Trinity Community Hospital needs to get involved in ensuring that the legislations that are put in place does not affect the hospital negatively. It is highly likely that congress may enforce legislation that will negatively impact the level of payments made to hospitals and physicians for certain services. However, there is a process of consultation involved in setting policies and Trinity needs to ensure that they lobby against anything which will affect the medical profession and the provision of health care negatively. References Gaynor, M and Haas-Wilson, D. (1999). Change, Consolidation, and Competition in Health Care Markets. The Journal of Economic Perspectives, 13 (1), p. 141-164 Zetter, L (2008). Lobbying: The Art of Political Persuasion. Britain: Harriman House Ltd Zuckerman, S,’ Brennan, N and Yemane, A. (2002). Has Medicaid Managed Care Affected Beneficiary Access and Use. Inquiry, 39(3), p. 221 - 242 Read More