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Strategic and economic factors in the hospital conversion process.

Cost containment and managed care pressures are driving hospitals to consolidate. Affiliation proposals from not-for-profit and for-profit partners will offer fundamentally different solutions to governance and economic issues. A clear definition of goals; an open, conflict-free proposal process; and a good understanding of value are the key ingredients of a successful transaction and regulatory approval, especially in an environment of heightened political interest in conversions.

Community-Institutional Relations↗

Conversion of HMOs and hospitals: what's at stake?

Because for-profit conversions of nonprofit organizations are regulated under trust law at the state level, their health policy implications have generally not been part of the process. This paper provides a health policy framework for assessing conversions of hospitals and health maintenance organizations (HMOs). It begins with basic differences in ownership forms and identifies considerations on both sides of the conversion question. The analysis turns on the extent of the social benefits of nonprofits: the regulatory tool provided by tax exemptions, trustworthiness in the presence of informational asymmetries, and community benefit activities. The analysis and the evidence suggest that the nonprofit form continues to hold significant advantages in health care that bear consideration by policymakers faced with conversion proposals.

Health Facility Merger↗

A road map from Nebraska.

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Community-Institutional Relations↗

Public policy issues in nonprofit conversions: an overview.

Conversions raise two critical policy questions: First, does ownership form (nonprofit or for-profit) make any difference to delivery of health care? Second, when conversions occur, how are charitable assets and purpose preserved? This paper addresses both questions, based on a review of evidence and experience. On the first question we conclude that, overall, nonprofit ownership enhances the potential for community benefit. However, that potential may be better realized by requiring nonprofits to meet minimum community benefit standards and possibly by mitigating pressure on institutions to convert. On the second question, we conclude that more states should take legislative action to establish a formal oversight process for conversions. Without public consideration of how much money to set aside and for what purpose, conversions pose the risk that communities will lose significant services and resources.

Health Facility Merger↗

The view from Ohio.

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Blue Cross Blue Shield Insurance Plans↗

The evolution of support for safety-net hospitals.

The federal government, mostly through the Medicare and Medicaid programs, has created and maintained a set of structural mechanisms to support uncompensated care and clinical education: disproportionate-share hospital payments and direct and indirect graduate medical education payments. This paper provides a history of how these traditional supports have evolved. We note that the need to reduce federal and state spending threatens the level of these payments, while changes in the health care delivery system highlight a range of design and technical inadequacies in the current support mechanisms.

Cost Control↗

Uncompensated care and hospital conversions in Florida.

Hospital conversions to for-profit ownership have prompted concern about continuing access to care for the poor or uninsured. This DataWatch presents an analysis of the rate of uncompensated care provided by Florida hospitals before and after converting to for-profit ownership. Uncompensated care declined greatly in the converting public hospitals, which had a significant commitment to uncompensated care before conversion. Among converting nonprofit hospitals, uncompensated care levels were low before conversion and did not change following conversion. The study suggests that policymakers should assess the risk entailed in a conversion by considering the hospital's historic mission and its current role in the community.

Florida↗

Capital finance and ownership conversions in health care.

This paper analyzes the for-profit transformation of health care, with emphasis on Internet start-ups, physician practice management firms, insurance plans, and hospitals at various stages in the industry life cycle. Venture capital, conglomerate diversification, publicly traded equity, convertible bonds, retained earnings, and taxable corporate debt come with forms of financial accountability that are distinct from those inherent in the capital sources available to nonprofit organizations. The pattern of for-profit conversions varies across health sectors, parallel with the relative advantages and disadvantages of for-profit and nonprofit capital sources in those sectors.

Capital Financing↗

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.

Academic Medical Centers↗

[Analysis of planning as a mediating device for institutional changes, based on a case study].

This study analyzes the role of planning technologies in a changing institutional environment in which they are involved as a space for mediation. This is a qualitative study, in which planning technologies were compared with theoretical landmarks in public health. A case study was conducted at the Cândido Ferreira Health Service in Campinas, São Paulo State, Brazil. By way of conclusions, the author proposes a methodological approach to stimulate the use of planning technologies as a device for institutional change. The focus is on the importance of planning in establishing a dialogue with other theoretical corpora, such as institutional analysis, psychoanalysis, and public health.

Hospital Planning↗

[Financial incentives for employees as part of a policy to upgrade care in a public hospital in Volta Redonda, Rio de Janeiro State, Brazil].

The authors present and analyze six years of regular and steady application of an institutional evaluation policy based on financial incentives in a public hospital in Volta Redonda, Rio de Janeiro State, Brazil, as a part of the hospital's administrative modernization policy. This type of policy is considered implicitly capable of developing a sequence of strategic wagers: (1) release of financial resources for payment of bonuses; (2) creation of an operationally feasible and sensitive evaluation instrument; (3) creation of adequate management mechanisms to improve evaluation policy; (4) employee adherence to the hospital upgrading policy based on the bonus system; and (5) maintenance of the effects of evaluation policy over time. The article discusses the "degree of success" of each of these wagers in an attempt to portray possible gains throughout the process, while also identifying inherent difficulties in such a policy.

Brazil↗

[Changes in hospital nursing care due to the Brazilian Unified Health System].

Considering changes in the Health System, this survey analyses the view of 31 nurses from a hospital institution linked to the Brazilian Unified Health System (SUS) in order to learn how they face the changes and their actions in 1995. To better understand the content of the interviews, authors use a thematic analysis proposed by BARDIN (1977). This analysis shows that some nurses recognize a different action after the SUS inclusion and others do not. However, when their actions are analysed as a whole, they are mainly directed to be a physician complementary action. The inadequate management by the nurse has contributed for a not entire nursing care. Authors suggest the management improvement of nurses in order to redirect nursing actions.

Adaptation, Psychological↗

Community health politics: transition of the Seattle USPHS Hospital.

To achieve transition of the Seattle US Public Health Service Hospital from federal to local control, the community overcame large obstacles; the most difficult was federal preference for closing the hospital rather than incurring additional costs essential for transition. The Washington State Congressional Delegation, local officials, hospital staff, patients and numerous community volunteers--individuals and private organizations--worked together to save the hospital and secure federal resources for its transition. Going through the transition influenced the hospital as it developed a new corporate structure, designed new administrative systems, and prepared to operate in a new environment while facing an uncertain future. The hospital has continued to cope with issues arising from transition, such as operating in a competitive context while reaffirming its community service heritage. Despite the difficulties of transition, Seattle preserved a valuable community health resource.

Community Participation↗