Module 2 Discussion
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Apr 3, 2024
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Physicians have often been described as the hospital’s primary customer and the facility as the doctor’s workshop. Given your understanding of the limits of doctors’ accountability to the hospital, what challenges does this present to the management of hospital services? How should these challenges be addressed?
The structure of hospital services in the U.S. is a unique collaboration of medical staff and administration. Health care is considered one of the largest and most complex industries in the U.S. in both cost and employment. According to the Centers for Medicare and Medicaid Services, U.S. healthcare accounts for around 17.3% of the gross domestic product (GDP) and continues to rise. (CMS.gov, 2023) In general, the overarching goal within a hospital is to provide care and treatment to inpatients and outpatients in exchange for monetary value. Among the medical staff, physicians and nurses are two of the main positions represented within the hospital setting. Physicians provide diagnosis of treatment and care plans for various of different ailments. Nurses are there to provide preventive care, treatment based on physicians’ orders, and day-on-day medical tasks. Within administration lies management, which is commonly associated with corporate functions, such as finance and human resources. According to the textbook, Jonas’ Introduction to the U.S Health Care System 8
th
Edition, modern-day hospitals have grown exponentially in the complexity of services offered and so has the organizational structure. (Goldsteen et al., 2016) Administrators who are closely responsible for supervising the hospital’s finances, and the management of its costs
have found it extremely difficult to monitor the physician’s lack of responsibility towards the institution. The main reason is that physicians have traditionally been largely free to order whatever tests or treatments they deem necessary for a patient. (Goldsteen et al., 2016) For instance, if a doctor chooses a certain therapy for a patient that may seem unnecessary from an administrative vantage, it is difficult to control these sorts of costs because doctors are the ones who are educated to provide care and treatment based on their knowledge. The physicians have no personal responsibility to see that the hospital is functioning nor does the individual physician carry any financial liability for the success or failure of the hospital. As a result, this leads to the challenge finance managers face within the organizational structure of controlling expenditures. Some ways that the administration has addressed these challenges are by the implementation of limitations that are set in place for physician’s freedom. One example of these limitations is the use of formularies, which are a limited set of pharmaceuticals that are provided by the hospital pharmacy for physicians’ prescriptions. (Goldsteen et al., 2016) This strategic plan allows the administration to ensure that the medication used within the institutions is being used correctly and to keep the
number of medicines that need to be held in stock under control. Although this limitation is useful and necessary it still doesn’t help with the challenges of controlling the cost. As physicians order all the hospital’s tests, services, and drugs provided to its patients, they are still major determinants of hospital costs. (Goldsteen et al., 2016) A cost-efficient method for administration and providers to manage the cost expenditures is the use of a time-driven-activity-based costing (TDABC) system to assign cost accurately and relatively easily to each process step along the way. According to the article, How to Solve the Cost Crisis in Health Care, through capturing all the costs over the complete cycle of care for an individual patient’s medical condition, allows providers and payors to address virtually any costing question. (Kaplan & Porter, 2014) This system would allow for transparency regarding physician’s treatment/care process and costs related to individual patients. This system also provides the opportunity to improve value, eliminate unnecessary process variations and processes that don’t add value, improve resource capacity utilization, deliver the right processes at the right locations and time, and optimize over the full cycle of care. (Kaplan & Porter, 2014) Overall, this process boosts the physician’s level of accountability to the hospital and provides the administration with a better chance to improve cost-effectiveness. References
CMS.gov. (2023). Historical
. https://www.cms.gov/data-research/statistics-trends-
and-reports/national-health-expenditure-data/historical#:~:text=U.S.
%20health%20care%20spending%20grew,spending%20accounted%20for
%2017.3%20percent. Goldsteen , R. L., Goldsteen , B. Z., & Goldsteen , K. (2016). Jonas’ introduction to the U.S. health care system, 8th edition
. Springer Publishing Company. Kaplan, R. S., & Porter, M. E. (2014, August 25). Solving the health care cost crisis
. Harvard Business Review. https://hbr.org/2011/10/solving-the-health-care-
cost-c
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