HEALTH SYSTEMS ORGANIZATION

18 February 2008

HEALTHCARE ORGANIZATIONS

• In-patient

• Out-patient

• Home services

• Day care

• Equipment/Supplies

• Spa

INTERORGANIZATIONAL RELATIONSHIPS

• MARKET TRANSACTIONS– INPUT - SUPPLIERS– OUTPUT - INSURANCE COMPANIES,

EMPLOYERS, PATIENTS

• INVOLUNTARY RELATIONSHIPS– GOVERNMENTAL- REGULATORY – PRIVATE - FINANCIAL

• STRATEGIC ALLIANCES

INTEGRATED ORGANIZATIONS

• HOSPITALS, PHYSICIANS, INSURERS, AND PURCHASERS FORM VERTICALLY AND HORIZONTALLY INTEGRATED ORGANIZATIONS

• IN OTHER CONTEXTS THESE ARE CALLED MONOPOLIES

HORIZONTAL INTEGRATION

• LINKING ORGANIZATIONS OF THE SAME TYPE TO INCREASE MARKET SHARE

• MEDICAL EXAMPLE– BUYING ALL THE NURSING HOMES

• MONOPOLY EXAMPLE– AT&T, Cox Cable

VERTICAL INTEGRATION

• LINKING ORGANIZATIONS SO THAT SUCCEDING TRANSACTIONS STAY WITHIN THE SYSTEM

• MEDICAL EXAMPLE– OCHSNER CLINIC

• MONOPOLY EXAMPLE– STANDARD OIL

HIGHLY INTEGRATED HEALTH SYSTEM

• VERTICAL INTEGRATION AND AN INSURANCE CONTRACT

• BIG MOVE TOWARD THIS IN THE 1980s AND 1990s

• TREND IS NOW AWAY FROM VERTICAL INTEGRATION

STRATEGIC ALLIANCE

• ANY FORMAL ARRANGEMENTS BETWEEN TWO OR MORE ORGANIZATIONS FOR PURPOSES OF MUTUAL GAIN

• THREE TYPES OF ALLIANCE– POOLED RESOURCES– SHARED PURPOSE– CONTRACTUAL/OWNERSHIP

INDEPENDENT PRACTICE ASSOCIATIONS

• LEGAL ENTITY COMPOSED OF PHYSICIANS WHO HAVE ORGANIZED FOR THE PURPOSE OF NEGOTIATING CONTRACTS TO PROVIDE SERVICES

• GROUP PRACTICE

SELF-REFERRAL

• ILLEGAL !

• DO YOU WORK FOR THEM OR ARE YOU BEING BRIBED ?

• STRATEGIC ALLIANCES (page 234)

PAYORS

• FEDERAL GOVERNMENT

• STATE GOVERNMENT

• EMPLOYERS

• CHARITIES

• INDIVIDUALS

INSURANCE

• ARE THEY PAYORS?

• SINGLE PARTY PAYOR

• NATIONAL HEALTH

INSURANCE IS A CONTRACT

• PARTIES TO THE CONTRACT– THE PATIENT AND THE INSURANCE

COMPANY

• HOW IS THE DOCTOR INVOLVED?

• HOW IS THE EMPLOYER INVOLVED?

INDEMNIFICATION INSURANCE

• WHAT MOST OF US THINK OF AS INSURANCE

• YOU HAVE A LOSS - THE INSURANCE COMPANY FIXES IT OR PAYS FOR IT

SELF INSURANCE

• GENERALLY INVOLVES THIRD PARTY ADMINISTRATORS

• LOOKS JUST LIKE INSURANCE

• USUALLY INCLUDES SOME TYPE OF CATASTROPHIC REINSURANCE

DIRECT CONTRACTING

• TAKES OUT THE INSURANCE COMPANY

• SAVES MONEY

• CREATES ISSUES FOR FOLLOW-UP

MANAGED CARE ORGANIZATIONS

• INTEGRATION OF FINANCING AND SERVICE DELIVERY

• INSURANCE COMPANIES WITH CAPTIVE PROVIDERS

• USE SOME SYSTEM OF GATEKEEPING

TYPES OF MCO

• HMO - HEALTH MAINTENANCE ORGANIZATIONS

• PPO - PREFERRED PROVIDER ORGANIZATIONS

• POS - POINT OF SERVICE PLANS

THE PURPOSE OF MANAGED CARE IS COST

CONTAINMENT

• HAS IT WORKED?

• ACCESS TO CARE

• CONTROL OF PHYSICIANS

• PREVENTION

CONSENT

CONSENT TO CARE

• YOU HAVE TO HAVE PERMISSION FROM A CONSENTING ADULT TO DO ANYTHING TO THEM

• VIOLATING THIS IS BATTERY• THE PATIENT MAY PICK AND CHOOSE

WITH SOME EXCEPTIONS• THE PATIENT MAY TERMINATE THE

RELATIONSHIP BY REFUSING CONSENT

SUBSTITUTE CONSENT

• NOT EVERYONE CAN CONSENT

• KNOW WHO HAS THE AUTHORITY AND TALK ONLY TO THEM

• PARENTS HAVE LIMITED AUTHORITY OVER THEIR CHILDREN

• SPOUSES HAVE NO AUTHORITY OVER EACH OTHER

QUESTIONS OF ABILITY TO CONSENT

• YOU EITHER HAVE SOMEONE WITH THE LEGAL ABILITY TO CONSENT OR YOU DON’T

• QUESTIONABLE SITUATIONS HAVE TO BE ADDRESSED BY A JUDGE

• BIG CITY HOSPITALS OFTEN HAVE THE JUDGE’S PHONE NUMBER POSTED IN THE ER

INFORMED CONSENT

• MORE DETAILED THAN SIMPLE CONSENT

• MANY STATES HAVE STATUTES

• THIS IS ABOUT NOT LOOSING A LAW SUIT

EXCEPTIONS TO CONSENT

• EMERGENCY EXCEPTION – PRESERVATION OF LIFE AND LIMB– THE PATIENT IS MEDICALLY OR

LEGALLY INCOMPETENT

• STATUTORY EXCEPTIONS– PUBLIC HEALTH LAW– MENTAL HEALTH LAW

• COURT ORDERED CARE