Topics

• Evolution- From Inpatient to Outpatient
• Organizational Structure
• References

NURS 410 - Health Care Delivery Systems & Informatics

Module 5: Healthcare Operations and Work Force

Evolution- From Inpatient to Outpatient

Veseley (2014) explains that the evolution from acute care or inpatient to outpatient care has been slowly occurring. However, the pace has picked up owing to a number of significant system forces:

• Inpatient stays are dropping while outpatient visits are rising, as a result of new technologies, reimbursement rules and payment models.
• Health system leaders are responding to these changes by reorganizing and streamlining their care delivery processes.
• Mergers and acquisitions are no longer horizontal among hospitals, but rather vertical as hospitals seek to control quality across the care continuum.
• The shift from inpatient to outpatient care is not the end game but simply a start toward a more integrated model that reaches patients in the home.

Hospitals will always be one site that is most appropriate for certain types of care. But we are seeing sicker and more complicated patients in the outpatient settings. Findings from a recent study, conducted by KNG Health Consulting LLC for the American Hospital Association (2015), noted that “patients who received care in a hospital outpatient department were more likely to be minority, poorer and have more severe chronic conditions than patients treated in physician offices” (para. 5).  The American Hospital Association thinks this shift is significant because these data have implications for access to care, continuity of care, hospital reimbursement, and organizational adjustments to support the needs of vulnerable patients. The report also noted that patient’s seen in hospital outpatient department were (para. 9-12): 

• 1.8 times more likely to live in high-poverty areas, and 1.7 times more likely to live in areas with a median income of less than $33,000;
• 1.7 times more likely to be Black or Hispanic; and
• 1.5 times more likely to live in areas with low rates of college education.

Read a brief article by Ms. Zaino, titled Changing Priorities Shift Hospital Focus to Outpatient Strategies, to learn how one type of service typically performed only in hospitals, has moved outside the confines of the acute care setting (http://www.healthcarefinancenews.com/news/changing-priorities-shift-hospital-focus-outpatient-strategies).  How does this shift impact future employment opportunities for the healthcare workforce?  How might reimbursement for care and services be impacted for the patient and for the organization?

In but Out

One rather new concept that carries significant impact to hospital operations, hospital reimbursement, hospital work force, and patient health care costs is the concept of “observation”.  According to Davis (2014), observation status is a way to keep a patient in the hospital without officially admitting them as an inpatient. The idea is to provide enough time to determine whether the patient is “sick enough” to admit.  Many hospitals have a designated area, such as a Clinical Observation Unit (COU), where healthcare personnel care for observation patients until the decision to admit or discharge.

Because observation services are by definition outpatient services, placement into observation or specifically a COU, needs to be discussed. In general, patients enter the hospital, perhaps through the Emergency Department (ED), but following patient assessment, uncertainty exists if inpatient admission is deemed necessary. A point of contention rests with costs and reimbursement. Regarding cost, as related to Medicare reimbursement, is the concept of the “three day rule” (The Advisory Board Company, 2013). This rule requires patients to be admitted for three days, as an inpatient before discharge or transfer to an extended care facility. If the patient is listed as observation patient for three days they do not meet the Medicare requirements and the patients Medicare B or other outpatient coverage will be billed for the care during the observation period.

There are benefits and limitations of observation and these reflect how hospitals are responding to the drive to triage patients appropriately and admit those most in need of acute care services. Asudani and Tolia (2013) list some of the benefits of COUs such as:

• Reduced general admissions overall
• Increased admissions for patients with complex and co-morbid conditions
• Better utilization of health care professionals
• Utilization of evidenced-based practice protocols

As expected, several limitations of COUs are noted:

• Requiring additional staff for dedicated units
• Careful coding of services to secure reimbursement payments
• Patients may experience more out of pocket expenses
• Observation days do not count as a qualifying inpatient hospital stay, hospital inpatient admission after which your doctor writes an order for transfer to a skilled nursing facility (SNF)
• Qualifying visit consists of 3 inpatient days needed for Medicare to cover a skilled nursing facility (SNF).

As we see, laws and policy influence health and health care. Take time to read about a recent Senate vote concerning hospital disclosure of observation decision to patients on http://www.fiercehealthfinance.com/story/observation-status-bill-sails-through-senate/2015-07-30 (MacDonald, 2015).