A Policy in Healthcare that was Implemented as a Result of Regulatory or Legislative Requirement - Research Paper Example

?Introduction California Sutter Health is revolutionizing the way that uninsured patients pay for their care. Their method is requiring uninsured patients to pay for services up front, which means that the patient pays for services before the services are rendered (Souza & McCarty, 2007). The registration staff has the duty to collect the money for the services, making the payment method front-end. Previously, Sutter Health, like many other health entities, performed the services, then billed the uninsured patient (Souza & McCarty, 2007). The policy that is in place is a good response to the California Assembly Bill 774, which established that hospitals must have fair pricing policies. This bill went into effect on January 1, 2007. This bill states that all acute, psychiatric and special hospitals must make patients aware of charity care, payment discounts, and government-sponsored health insurance. It also requires hospitals to standardize its billing and collection procedures (California Assembly Bill 774). Basically, this law requires transparency in hospital billing, as all hospitals must have detailed information about their charity policies, including who is eligible and what procedure must be taken for eligibility, and a written description of how the hospitals collect the debts. Also required is a written disclosure of the hospital billing practices and debt collection procedures for everybody (California Assembly Bill 774). Analysis The rationale for this particular change in the way California Sutter Health is doing business is rather simple – health care costs are spiraling out of control, and uninsured patients contribute much to the ever-burgeoning cost of health care to this country. As of 2005, some $45 billion worth of medical care is not being paid by uninsured patients (Families USA, 2005). What this means is that those with insurance pick up the tab for the people who cannot pay in the form of higher premiums. Another rationale for implementing this scheme is to encourage uninsured patients to get the care that they need, when they need it. Prior to the California Sutter Health scheme, many individuals did not visit the doctor when it was necessary, for fear that they would be hit with high medical bills (Families USA, 2005). This is because there was a great deal of uncertainty going in how much a certain procedure or visit would cost. What California Sutter Health did was show the patient, up front, what the costs would be, and this greatly empowers patients. The reason why this empowers patients is that they can see how much they will pay for something in advance. Then, they could either decide to get the procedure done, at that time, if they had the money for it, or they could decide to put the procedure off until they had the chance to save up the money that was needed. Therefore, everybody wins – the patient is allowed to know, up front, how much a procedure might cost, which helps the patient, and the hospital itself does not find itself stuck with uncollectible bills that makes the cost of health care higher for everybody. This scheme allowed CSH to reduced its account receivables by $78 million in just three months (Souza & McCarty, 2007). These are some of the benefits of the program. Which is not to say that the policy is without its costs. There were a few bugs that needed to be worked out before the policy was implemented. For instance, the patient financial services staff member, and the Central Business Office could not access real-time financial information and management could not generate detailed reports (Souza & McCarty, 2007). Moreover, there was the costs of properly training the patient financial services (PFS) staff, for they had to be trained in spotting errors and correcting them, such as when the occurrence code is incorrectly filed or accident information is missing from the claim (Souza & McCarty, 2007). Further training had to be done with registration employees, who were never accustomed to asking for money; they had to be trained on the proper way ask for money and the proper way to interact with patients before asking for money. Additionally, training of the Central Business Office employees was necessary, as they were now taxed with the responsibility of taking control of their own accounts and keeping them until they were concluded successfully. As for the impact on client satisfaction, the client in this case being the patient, all indications are that this has been a good thing for the patients, making them more satisfied. This is because, while the policy was not necessarily a huge change for the patients who have insurance, as they are used to paying such items as deductibles and co-pays up front, it provides additional benefits. For one, there was a transparency that the patients never had before. No longer would they be hit with “sticker shock” as they receive a bill for a certain procedure that seems outrageously high. Now, they know in advance what to expect. Moreover, the patients win because CSH forced to make their charges more reasonable, while providing such services to patients as discounts, flexible payment options, in-depth financial counseling and education about billing practices ( As for the patients, this new system was either not a big change for them, as they are already accustomed to paying co-pays and deductibles up-front, or they are enthusiastic about it, as it gives them a concrete financial figure up-front. This sort of transparency proved reassuring for patients. At the same time, the system presented new challenges that CSH had to face, including the fact that cost-shifting would no longer be acceptable, as the charges must be reasonable; that certain individuals would not be able to pay their bills, and these individuals would be in need of discounts, flexible payment options and in-depth financial counseling; and patients needed to be educated about billing practices (Souza & McCarty, 2007). Because of the transparency, the new options given indigent patients, and the education about billing practices, the patients were grateful for the change, as opposed to resentful (Souza & McCarty, 2007). As for the effects on organizational effectiveness, the policy has obvious implications for health care for all patients. If a hospital is struggling because of unpaid bills owed to it, then that necessarily means that the hospital will have that much less in its budget, which will, in turn, affect the quality of the care that is provided for the patients in that hospital. Consider that $78 million was recovered in just three months of the program. That is $78 million that can now be used to increase the quality of care for all patients. Perhaps part of the $78 million could be used to update the hospital equipment, or hire additional staff, or lessen the financial burden on all patients by not charging as much for services. The point is is that $78 million is now available to the hospital, where it was not before, and this is just in three months. This actually comes out to around $300 million a year in recovered revenues, and it is easy to imagine how much quality management in the hospital will be elevated when the hospital has that much more in its budget to spend. This also impacts quality management, because a hospital that has more to spend on care will necessarily also provide higher quality care. Moreover, quality management is impacted because patients are getting care when they might not have before. As indicated above, many uninsured patients do not seek care, simply because they feel that they cannot afford it. With better transparency, now they either know that they can afford it, or that they must save up for it. Mountford et al. (2005) propose another approach that could make Sutter Health’s policy even better. They propose that, when a patient comes in for care, the patient is referred to a financial counselor. The financial counselor reviews the patient’s tax returns or paycheck stubs, to ascertain the true ability of the patient to pay for services. If the patient is below 200% of the federal poverty level, the patient receives a 100% charity discount. If the patient is between 200 and 400% of the federal poverty level, the patient receives a discount, and this amount is tied to how much Medicare payments the hospital will receive on behalf of the patient (Mountford et al., 2005). In this scheme, the patients who cannot afford care still get care. The patients who can afford care, must pay 100% up front. This affects quality management because patients are no longer afraid to go to the doctor for fear that they cannot afford it. If they truly cannot afford it, they do not pay. If they can afford it, they must pay, but the transparency helps them decide if they get care right then or save up for it. In this way, patients may be encouraged to seek help while problems are small, such as getting mammograms and other preventive medicine, as they can be assured that they can financially afford whatever problem might be found. This, in turn, increases quality, as patients are getting care earlier, before a small problem turns into a large, unmanageable one. This aids in nursing care delivery, as the problems that present themselves may be smaller, which, in turn, puts a smaller tax on nursing care delivery. Sources Used California Assembly Bill 774. Ca.gov. Available at: http://www.oshpd.ca.gov/HID/Products/Hospitals/FairPricing/ Families USA. The added cost of care for the uninsured in California. FamiliesUSA.org. Available at: http://www.familiesusa.org/resources/publications/fact-sheets/the-added-cost-of-care-for-Uninsured-in-California.html Mountford, G., Smith, J.C. & Todd, J. (2005) Dealing with self-pay patients compassionately: Like the sword of Damocles, collecting from self-pay patients should be approached with caution and resolve. Bnet. Available at: http://findarticles.com/p/articles/mi_m3257/is_12_59/ai_n15980896/pg_2/?tag=mantle_skin;content Souza, M. & McCarty, B. (2007) From bottom to top: How one provider retooled its collections. Bnet. Available at: http://findarticles.com/p/articles/mi_m3257/is_9_61 /ai_n21118537/pg_4/?tag=mantle_skin;content Sutter Health. 2010 financial highlights. Sutterhealth.org. Available at: http://www.sutterhealth.org/annualreport/financials-uninsured.cfm Read More