Another link to improving the working environment in acute care hospitals: registered nurses' spirit at work.

Hospitals are situated within historical and socio-political contexts; these influence the provision of patient care and the work of registered nurses (RNs). Since the early 1990s, restructuring and the increasing pressure to save money and improve efficiency have plagued acute care hospitals. These changes have affected both the work environment and the work of nurses. After recognizing this impact, healthcare leaders have dedicated many efforts to improving the work environment in hospitals. Admirable in their intent, these initiatives have made little change for RNs and their work environment, and thus, an opportunity exists for other efforts. Research indicates that spirit at work (SAW) not only improves the work environment but also strengthens the nurse's power to improve patient outcomes and contribute to a high-quality workplace. In this paper, we present findings from our research that suggest SAW be considered an important component in improving the work environment in acute care hospitals.

Managed care arrangements of health networks and systems. A review of the 1999 experience.

The 1990s witnessed various health provider efforts to integrate health care delivery with financing functions. Physician and hospital-led organizations developed their own insurance products and also contracted on a capitated or shared-risk basis with health maintenance organizations (HMOs). Several studies exist on the efforts of physician-led health organizations in these areas, but few studies exist on hospital-led organizations. We examined unique data on hospital-led health networks and systems for 1999 and found that about 60% had provider-owned insurance products and 50% held capitated contracts for their affiliates. In addition, these hospital-led organizations--especially health systems--had comparable levels of capitated contracting when compared to physician-led organizations. Although interest in capitation has waned, current economic realities may reignite interest in these arrangements given their potential for containing health expenditures without increasing consumer risk. In light of this, it is now a good time for physicians and medical group managers to reflect on their experiences in the 1990s and to assess the merits and shortcomings of different intermediary organizations with which they may align.

De-capitating managed care contracts. Some providers say global capitation has tied a noose around their finances.

Just a few years after global capitation seemed like the wave of the future, it has crashed into reality: Most of the inefficiencies have been squeezed out of the U.S. healthcare system, and capitated rates are no longer covering costs. Some HMOs are returning to older payment methods, such as per diems.

Hospitals' vertical integration into skilled nursing: a rational approach to controlling transaction costs.

Using 1985 and 1988 American Hospital Association data, this study examines 1,523 hospitals nationwide and concludes that hospitals' ownership of skilled nursing facilities helps minimize the transaction costs associated with post-acute patient transfers while productively using empty hospital beds. Unfortunately, such ownership creates complex cost, quality, and accessibility trade-offs in terms of the skilled nursing care provided.

Reengineering health care materials management.

Health care executives across the country, faced with intense competition, are being forced to consider drastic cost cutting measures as a matter of survival. The entire health care industry is under siege from boards of directors, management and others who encourage health care systems to take actions ranging from strategic acquisitions and mergers to simple "downsizing" or "rightsizing," to improve their perceived competitive positions in terms of costs, revenues and market share. In some cases, management is poorly prepared to work within this new competitive paradigm and turns to consultants who promise that following their methodologies can result in competitive advantage. One favored methodology is reengineering. Frequently, cost cutting attention is focused on the materials management budget because it is relatively large and is viewed as being comprised mostly of controllable expenses. Also, materials management is seldom considered a core competency for the health care system and the organization performing these activities does not occupy a strongly defensible position. This paper focuses on the application of a reengineering methodology to healthcare materials management.

Improving the odds.

Health care providers are using information systems to gather and analyze data that will help make entering capitated managed care contracts less of a gamble.

Upstairs downstairs: vertical integration of a pediatric service.

BACKGROUND: The combined effects of recent changes in health care financing and training priorities have compelled academic medical centers to develop innovative structures to maintain service commitments yet conform to health care marketplace demands. In 1992, a municipal hospital in the Bronx, New York, affiliated with a major academic medical center reorganized its pediatric service into a vertically integrated system of four interdependent practice teams that provided comprehensive care in the ambulatory as well as inpatient settings. One of the goals of the new system was to conserve inpatient resources. OBJECTIVE: To describe the development of a new vertically integrated pediatric service at an inner-city municipal hospital and to test whether its adoption was associated with the use of fewer inpatient resources. DESIGN: A descriptive analysis of the rationale, goals, implementation strategies, and structure of the vertically integrated pediatric service combined with a before-and-after comparison of in-hospital resource consumption. METHODS: A before-and-after comparison was conducted for two periods: the period before vertical integration, from January 1989 to December 1991, and the period after the adoption of vertical integration, from July 1992 to December 1994. Four measures of inpatient resource use were compared after adjustment for case mix index: mean certified length of stay per case, mean number of radiologic tests per case, mean number of ancillary tests per case, and mean number of laboratory tests per case. Difference-in-differences-in-differences estimators were used to control for institution-wide trends throughout the time period and regional trends in inpatient pediatric practice occurring across institutions. Results. In 1992, the Department of Pediatrics at the Albert Einstein College of Medicine reorganized the pediatric service at Jacobi Medical Center, one of its principal municipal hospital affiliates, into a vertically integrated pediatric service that combines ambulatory and inpatient activities into four interdependent practice teams composed of attending pediatricians, allied health professionals, house officers, and social workers. The new vertically integrated service was designed to improve continuity of care for patients, provide a model of practice for professional trainees, conserve scarce resources, and create a clinical research infrastructure. The vertically integrated pediatric service augmented the role of attending pediatricians, extended the use of allied health professionals from the ambulatory to the inpatient sites, established interdisciplinary practice teams that unified the care of pediatric patients and their families, and used less inpatient resources. Controlling for trends within the study institution and trends in the practice of pediatrics across institutions throughout the time period, the vertical integration was associated with a decline in 0.6 days per case, the use of 0.62 fewer radiologic tests per case, 0.21 fewer ancillary tests per case, and 2.68 fewer laboratory tests per case. CONCLUSIONS: We conclude that vertical integration of a pediatric service at an inner-city municipal hospital is achievable; conveys advantages of improved continuity of care, enhanced opportunities for primary care training, and increased participation of senior clinicians; and has the potential to conserve significant amounts of inpatient resources.

The evolution of primary care networks.

Many physician practices and primary care networks owned by hospital-based healthcare systems have not been successful financially. By investing capital, time, energy, and management expertise in these networks, however, systems can dramatically improve their strategic advantage. A three-stage evolutionary process that is necessary to achieve this strategic advantage comprises practice acquisition, network development, and true integration. Although few primary care networks run by hospitals or systems to date have reached stage three, understanding the evolutionary process is a necessary first step toward success.

Service-line management/bottom-line management.

To survive in the sturm und drang of health care administration, hospitals and health care systems will have to restructure themselves in ways that emphasize their specific clinical strengths, control their costs, and manage the delivery and outcomes of care. Structuring the organization along clinical lines of service (e.g., oncology, cardiology, rehabilitation) cedes total bottom-line authority for all aspects of that service to the service, or product, line manager. This article discusses the qualifications, compensation, and responsibilities of service-line managers in well-integrated health care systems and describes how they and managed care organizations view each other. It also suggests which organizations will, and will not, benefit from restructuring along service lines.

The quiet restructuring. Blaming feds, hospitals shed workers, facilities in droves.

A major downsizing is under way in the hospital industry. Hospitals are laying off thousands of workers and closing down a variety of services. Facilities cite the usual suspects for taking such drastic action: managed care, reimbursement changes in federal healthcare programs, plummeting inpatient loads and consolidation. This is the first in a two-part series on financial turmoil in the industry.