1 Your topic: Business Operations and Administration Your topic's description: Business Operations and Administration Prepare and submit a paper responding to the following items: Use the online library, Internet, required reading, and other resources to research and develop a more complete appreciation of business operations and administration. Based on your findings, write a scholarly paper that clearly addresses the following: Identify and describe an area of business operations and administration to include the services provided, key personnel within the department, and how this department supports or is supported by other departments. Identify and describe at least two trends that have an impact on the setting you selected. These can be trends related to supply and demand, political climate, regulatory, demographic changes, or patient care. Evaluate the impact of these trends on business operations and administration. Analyze the trends, and thinking as a healthcare administrator, how do you capitalize on these trends to improve operation and bottom line performance? How can you mitigate the negative impact of the trends? Assignment Expectations: Write a 4- to 6-page double-spaced paper (this does not include title and reference pages). It needs to be well written, based on information from scholarly research, and should demonstrate a thorough analysis of the topic. Required Reading: Chassin, M., Loeb, J. Schmaltz, S., and Wachter, R. (2010). Accountability measures Using measurement to promote quality improvement. The New England Journal of Medicine, 363(7), 683. Shen, Y. and Eggleston, K. (2009). The effect of soft budget constraints on access and quality in hospital care. International Journal of Health Care Finance and Economics, 9(2), 211-233. Your desired style of citation: APA Your educational level: Premium Number of page: 8 Words 2000
2 Running Head: BUSINESS OPERATIONS AND ADMINISTRATION Health Care Business Operations And Administration [Writer Name] [Institute Name]
3 Business Operations and Administration Introduction The health care industry in United States of America has gone under major structural changes in the past decades due to the external environment factors in the economy. These external factors include but not limited to political climate, regulatory, demographic changes, quality of patient care and supply and demand side drivers. These factors and changes in the structure of industry have increased complexity United States of America health care system. The costs are rising, the profit margins are decreasing, the quality and management level are declining and rate of health care frauds is increasing. These are very serious issues under consideration in all stakeholders i.e. citizen, business community, government, the work force involved in the medical profession and other social and political identities. On the other hand health care managers and administrators are striving to cope up with the situation and to provide best quality of services with the available resources. This paper aims to analyse these trends and the impact of these trends on the health care administrations and administrators as well as suggestions to improve health care administration and quality of care. Discussion Health care costs have been rising consistently for the past 6 decades at more or less 3-4 %/annum. No efforts until now have proven to be successful to curb the rate. One of the most significant factors is the demand and supply side drivers. One of the main reasons is the technological innovation and advancement in the profession. Due to technological innovations prices rise, due to high costs and on the other hand demand for these services increases. In contrast to other industries technological innovation has huge
4 impact on the medical insurance. Health care technology is often a complement rather than a substitute for labour e.g., requiring many technicians to utilize the new equipment (Shortell & Kaluzny, 2006). In addition to that, the consumers (health care patients) of the industry are not fully aware to distinguish between the products and services offered by the producers (health care providers) therefore the system lacks pricing transparency. Another reason for the rising costs is defensive medicine it connotes the tendency of physicians to order more than needed diagnostic tests which increases the aggregate costs of medical care in the economy (Shortell & Kaluzny, 2006). There are several reasons for this tendency, fear to be sued being the primary reason. The medical practitioners get sued for not ordering diagnostic tests. Estimation of the contribution of defensive medicine is difficult since physicians may order tests and procedures due to multiple reasons such as commitment to provide best care, may add to income of physicians as well as they don t want to end up in court (Shortell & Kaluzny, 2006). The industry is working under heavy regulations at both federal and state level by professional associations and myriad agencies. The federal government is the dominant consumer thus stimulating prices. Market forces in health care industry have accommodated more piecemeal legislative actions and regulations at federal level (Field, 2007). The National Quality Forum introduced 600 quality measures in 2004. The Centre for Medicare and Medicaid Services (CMS) started to posted fine and penalties to hospitals who failed to report performance data matching to Joint Commission. This quality-measurement and improvement effort is not without cost... The requirements are such that a small industry of performance-measurement system vendors, extensively
5 vetted and operating under stringent quality standards, supports the ORYX initiative (Chassin, Loeb & Schmaltz, 2010). The transition of Medicare from cost reimbursement 2to the Prospective Payment System followed by the uniform rate cuts across industry in 1997 Balanced Budget Act has put enormous financial pressure on the health care industry. The percentage of hospitals reporting negative income grew from 21% to 29% during 1995 to 2004. There are substantial researches and studies that provide evidences that financial pressures negatively affect service quality of the hospital and it is widely accepted that a lower operating margin is associated with increased odds of adverse patient safety events (Shen & Eggleston, 2009). Due to the ever-growing complexity in the structure of the industry, it has become almost impossible to control security leaks and prevent fraudulent attempts. In 2009 alone, frauds, scams and organised criminal gangs costing 100 Billion dollars to United States of America economy. The most common practice is identity fraud which is happens when any legitimate personnel sells off patients information to organised criminals. "Miami is the 'Ground Zero' for a lot of where these schemes begin, and they're spreading like cancer to California, Detroit and Houston" said FBI's Montemorra. Current government is trying to convert patients information and history from hardcopy to softcopy format, but various security professional are very concerned that in the absence of adequate security measures during this conversion may provide new opportunities for fraudulent acts (Kavilanz, 2010).
6 Different Approaches to Counter Effects Shen & Eggleston proposed to apply Soft Budget Constraints devised by Kornai 1986 to measure overall financial health of a hospital reporting negative income consistently. SBC measures are used to estimate if an organisation should be bailed out or to be left to fail under consistent underperformance. According to Kornai an organisation is able to run on SBCs if the expenses are consistently more than the revenues but it is receiving subsidy from government or parent company to prevent shutdown. They have shown that SBCs affect significantly on cost controls and there fair chances to damage the quality but their empirical finding shows that SBCs can be predicted to be protective of quality. The sources of SBCs in their study are (i) internal financial health of a hospital, (ii) external financial environment and demand for health care. Their findings suggest that there is a positive correlation between high profit margin and SBCs lowering the probability of shutting down safety net services while excluding Emergency Department, higher profit margin is related to higher probability that leads to shutdown safety net services. Moreover, they have found that SBCs are helpful to dampening cost innovation incentive is over the dampening of quality innovation thus quality is more vulnerable during cost control measures in health care as compare to other industries. Therefore administrators must very mindful which formulating policies and should address all aspect of quality of a health care facility or organisation (Shen & Eggleston, 2009). Another study to improve and maintain quality of the industry has found that most of the hospitals are producing less than they can. The productivity and efficiency and quality can be improved up to 26%. The study was conducted on data received from
7 American Hospital Association Annual Survey and the Medicare Cost Reports. The study calculated relative output based efficiency to determine the level of congestion. These productivity losses were then accounted from the level of output and input slack values were determined by DEA. The efficiency or relative inefficiency plus the measures and the need for quality improvement was determined by the difference of the adjusted and unadjusted balances. The calculations suggest that the overall efficiency of hospitals can be increased by 26%. This leads to further implication that reallocation of resources could increase the relative quality among hospitals in our sample. Further, higher quality in some dimensions of care need not be achieved as a result of higher costs or through reduced access to health care (Valdmanis, Rosko & Mutter, 2008). Interview Title/position Summary of Academic and Professional Background Background Information As much as United States of America health care system has evolved with increasing complexity, patient s care and customer expectations has risen than ever before. Resources are shrinking and hospital administrations are having a hard time to carry on traditional approaches of quality service and delivery of quality service. The regulatory, pricing and cost pressures have adversely affected the overall business and profit margin of nearly all the hospitals and administrators in the hospitals are struggling to keep up the level of quality making sure their own survivals. As a seasoned administrator, you have faced almost all ups and downs in the industry. I would like you to share your valuable experience suggestions and recommendations with us
8 Q: What is Quality Management? XYZ: Quality management for health care delivery is a frame work that continuously helps management to plan or organise, share or communicate, monitor and improve when needed all aspects of health care delivery. It also makes sure that a systemised high quality delivery comes with lowest costs. The industry today is very demanding and every hospital has to have a highly structured a highly structured quality assurance system. Q: What is the relationship between cost and quality? XYZ: there are several aspects of relationship of cost and quality. Primarily the quality waste represents the resources utilised in a process whose outcome is discarded or is useless therefore the resources that were used in that processes are wasted. Secondly low productivity refers to the phenomenon that two or more than two processes yield same outcome and more resources have been utilised to reach the same end. New technology usually increases cost of the process. Even though it enhances the quality of the outcome in one way or another but it also increases cost of the process. Finally Preventive medicine and environmental health not only have prevented diseases but they have proved themselves as most cost effective form of health care. Q: what are the principles of a quality control or quality assurance system in health care industry? XYZ: the foundation of such a system is to achieve highest level of quality with lowest level of costs. Now that requires taking under consideration there must be explicitly defined quality goals, they are measurable and their output can be evaluated against
9 specifications. The idea is to change the process so that we can avoid quality waste and low productivity etc. The system should be continuous. Q: What are the salient features of a quality control Model? XYZ: A quality control model must address quality issues in the following areas Quality of Management: it involves designing and implementing critical management factors and functions that control quality and cost standards. They are controlled and operated by the management of the hospital. Quality of Delivery: we must meet patients expectations 100% all the time. But, if the expectations are unreasonable or unrealistic than we have to educate them to reach to a realistic level. This must be under the guidance of quality control system. Value of care: the system must ensure high standards of physical infrastructure which includes issues related to technology, system integrate and long-term maintenance of the plant. It also address professional infrastructure i.e. staffing of expert health care and management professionals. Optimistic decision making processes make sure that misdiagnoses are avoided because they costs unnecessary utilization of resources and waste of quality. The system should enforce excellent manner of treatment so as to avoid procedures and treatment leading to identical results especially during diagnostic procedures. The health care system is very complex and human involvement is essential. On the other hand human beings are imperfect information processors. They will always commit mistakes irrespective of intention or attention there for the system must clearly define standard operation procedures for all the processes to discourage waste of productivity and mitigation of errors and mistakes.
10 References Chassin, M., Loeb, J. Schmaltz, S., and Wachter, R. (2010). Accountability measures Using measurement to promote quality improvement. The New England Journal of Medicine, 363(7), 683. Donabedian, A. (1980). Explorations in quality assessment and monitoring, vol. 1: The definition of quality and approaches to its assessment. Chicago: Health Administration Press. Field, R. (2007). Health care regulation in America: Complexity, confrontation, and compromise. New York: Oxford University Press. Kavilanz, P. (2010, January 13). Health care: A goldmine for fraudsters. Retrieved from http://money.cnn.com/2010/01/13/news/economy/health_care_fraud/ Olsen, K. (n.d). Outpatient outlook. Retrieved from http://www.healthleadersmedia.com Presentation from an established health care administrator, Michael A. Young, CEO, Grady Health System-IMPACT, on management within the sector. http://www.youtube.com/watch?v=lmqypfqkomg Provides a tour of the behind the scenes plant and facilities of Sinai Hospital. http://www.youtube.com/watch?v=idm1hctc8hm Shen, Y. and Eggleston, K. (2009). The effect of soft budget constraints on access and quality in hospital care. International Journal of Health Care Finance and Economics, 9(2), 211-233. Shortell, S. M. & Kaluzny, A. D. (2006). Health Care Management: Organizational Design and Behavior (5th ed.). Clifton, NY: Delmar, p. 428. Study shows
11 alarming trends in outpatient care. (2009, April 21). Retrieved from http://www.surgistrategies.com Valdmanis, V., Rosko, M., and Mutter, R. (2008). Hospital quality, efficiency, and input slack differentials. Health Services Research, 43(5), 1830-1848. Retrieved from http://ehis.ebscohost.com/ehost/viewarticle?data=dgjymppp44rp2%2fdv0%2bnj isfk5ie46brjsq21tbck63nn5kyg4dvmgfg2r0mtqlzhskavsj6pue2wsljinsbl PvLo34bx1%2bGM5%2bXsgeKzr1CuqbBIsKy0SqTi34bls%2bOGpNrgVd%2fm 5j7y1%2bVVv8SkeeyzsUyxrbNQrqekfu3o63nys%2bSN6uLyffbq&hid=6