Government Role in Hospital Growth and Decline

Introduction

The U.S government has played a significant role in ensuring hospital growth in terms of universal access to quality care and universal protection of health care costs.  Hospitals  are  elements which are included in the health care system  and the government ensure that  health care facilities  can  access  medical technology, trained  physicians  and offer quality care to the  uninsured. The health care system in U.S  is one of the economic activity where  market play a big and a  significant role in  ensuring that citizens receive  quality health care services. In ensuring hospital growth, the level of authority which comprise federal, state and local government purchases health care for elder and disabled people. The federal government has a regulatory role of creating health care standards which   ensure that clinicians offer quality care.  Other regulatory standards in private sectors such as Medicare and Medicaid have improved care and patient outcomes. However, the government has also contributed in the decline of hospitals by allowing Changes in Reimbursement and hospital closures.

 Government funding

 In hospital growth, financial capital is vital for health care organization to meet the community needs, implement new technologies, offer new serves and enhance quality.  Government has a primary responsibility in offering a substantial capital   which aids in advance in technology and creation of for hospitals (Shi & Singh, 2012). The development of these hospitals expands the health care system and physical therapy practices. Funding has also brought new medical technology   and has made changes in healthcare sphere. Government plays an important role in hospital growth through the allocation of funds.  The government has increased growth through funding the hospital services in both rural and urban areas and medical procedures. Through these methods, the government ensures hospital growth and provision of public health services (Galloro, 2010). The connection between Commonwealth and Territory government play an important role in funding public hospitals and setting policy parameters and hospital programs.

Hill-Burton Act of 1946

            The World War 2 led to devastating effects in that hospitals were destroyed but the U.S government has ensured construction of new hospitals through the Hill-Burton Act.  The latter improved the supply, increased hospital beds and quality health care services to poor people. The government offered Hill-Burton funds where all people receive quality hospital care (Galloro, 2010).  The Act also developed hospital-building programs where all countries regardless of race, gender and more received hospital beds.  By 1975, about one third hospital was constructed and 6,800 were financed by the Act (Shi & Singh, 2012).  Hospital, clinics and rehabilitation centers were developed and they still exist and help the uninsured to access care.  Hospitals are expected to offer subsidized care, demonstrate community benefit and provide care to the uninsured.

Public health insurance

 The Affordable Care Act (ACA) led to coverage expansion and financial position for hospitals.  Medicare   also introduced fixed prices, improved hospitals by reducing inefficiency, reducing intensive care use and improved financial position.  The Omnibus Budget Reconciliation Act led to improvement in hospitals as they were able to control spending per recipient. Reimbursement systems were developed and these have allowed the State governments to implemented varied policies design (Shi & Singh, 2012).  Generally, the Medicaid programs   developed prospective reimbursement which has minimized growth in spending.   The health care coverage provides indirect funding which has led to benefits in coverage gains to low-income population vulnerable populations.  Medicaid has led to hospital growth and increased   the affordability of care, self-reported health and positive health outcomes (Galloro, 2010).

In ensuring hospital growth, the government provides quality health care by providing clinical guidelines  which  play role in standardizing treatment and improving quality.  The government creates model programs and initiatives to help clinicians in diagnostic of disease and treatment. The government also enhances growth by ensuring that the vulnerable population access quality cares.  This is done by ensuring federal tax exclusion where employers provide health care coverage to employees (Shi & Singh, 2012). The government has also developed support programs and financial support to the vulnerable groups such as homes and uninsured.  The government also ensures the growth of hospitals through the provision of public health insurance.  Medicare and Medicaid programmes have played a significant role in expanding hospitals and access to care.  The government has created a health care workforce where it offers education and career development (Galloro, 2010). Since competitive market forces affected the career decision, the federal government has created funding programs where health care workers   gain clinical and cognitive abilities.

 

Governmental role in hospital decline

Changes in Reimbursement

            The Affordable Care Act led to modification in the healthcare revenue cycle, care delivery and payment collection with an aim of maximizing profit.  The created value-based care models have benefits some while others have experienced challenges due to unpaid patient payments and more. The Prospective payment system brought new payment methods where patients were given fixed amount based on principle diagnosis and not considering the length of stay (Shi & Singh, 2012). The fixed reimbursement amount affected the length of stay and this led to early discharge and hospital closures.  The Balanced Budget Act led to changes in Medicare reimbursements with an aim of reducing net spending by $116.4 billion.  However, the rate of prospective payment system reduced in all diagnosis-related groups and other reduction was noticed in disproportionate share payments and payments on indirect medical education.  The changes in reimbursement reduced Medicare patients by 40%   and Medicare margins decreed from 10.3% to 1.7% (Manchester & Schwabish, 2010).  Hospitals experienced financial stress and by trying to maintain the operating margins, patients’ services were curtailed, nursing staff decreased in quality and quantity and there was a reduction on level of services.

 

Rural hospital closures 

Major forces for hospital disclosure are cutbacks in spending   which account for 9% to 13% of total GDP (Shi & Singh, 2012).  To manage the debt, the government initiated strategies such as closure of hospitals in order to remove inefficiencies. The government has played role in hospital decline in that there was a high constraint on hospital budget and   hospitals which experienced budget reduction used case-based funding formulas to increase efficiency.  However, the case-based funding were affected by hospital restrictions why reducing acute care beds and community-based care. In August  2004, research  showed  that 959 small rule hospitals  have been concerted to  Critical Access Hospitals  and this has contributed to adverse effects in that  communities are not accessing heath care  and  per-capital Medicare expenditures is increasing  at a slower rate (Manchester & Schwabish, 2010).  The hospital decline has also contributed to job loss where workers suffer for employment and work for low wages.

Conclusion

 Government has played a significant role in hospital growth by providing funds for hospital construction and public health insurance.  For example during the Great Depression, hospitals were destroyed and the government offered federal grants where new hospitals were constructed.  The Hill-Burton Act ensured that there was nations’ bed supply and hospitals. In addition, the government has ensured hospital growth through creating Medicare and Medicaid which has impacted the hospital beds and utilization. Elderly and poor Americans benefited from these programs and community hospitals increased dramatically. However, the government has also played role in hospital decline in that the hospital Medicare reimbursement brought a new prospective payment method where hospitals focused on early discharge post acute car. The prospective payment system led to competitive pricing and other devastating effects such as hospital closure in rural areas.

 

 

 

 

Reference

 

Shi, L., & Singh, D. A. (2012). Delivering health care in America: A systems approach. Sudbury, Mass:

Jones & Bartlett Learning.

 

Manchester, J., & Schwabish, J. A. (2010). THE LONG-TERM BUDGET OUTLOOK IN THE UNITED STATES

AND THE ROLE OF HEALTH CARE ENTITLEMENTS. National Tax Journal, 63(2), 285-305.

 

Galloro, V. (2010). Better than expected. Modern Healthcare, 40(27), 32.