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Healthcare Management Essay

Executive Summary

There are over 850,000 physicians practicing in the United States today, covering every imaginable specialty and sub-specialty (Young, Chaudhry, Rhyne, & Dugan, 2011). According to the World Health Organization (2000), even though our country spends more money per capita than any other country in the world, the USA ranks 37 out of the top 191 countries in the world in terms of overall health system performance. Although there are many reasons for this poor performance, several experts cite the lack of emphasis on primary care and true preventative medicine in the US (The Commonwealth Fund Commission on a High Performance Health System, 2011). This is a proposal to create a community ambulatory health center in a suburban community that would provide the setting for training family medicine residents.

The establishment of such a center would allow a hospital to provide better primary care services to the uninsured and underinsured patients in its community. It may also help reduce unnecessary emergency room visits as well as hospital readmissions by providing quality care to these patients. A training program would also improve the hospital’s ability to recruit and retain actively admitting primary care physicians. The proposal discusses the process for choosing the center’s location, funding models, administrative structures, as well as staffing and architectural requirements.

Strategy of Service Lines and Location

As mentioned in the executive summary, it is well known that many communities in the US could benefit from increased access to primary care services (Commonwealth Fund Commission, 2011). Even within suburban communities that may appear seemingly affluent, there are often significant socioeconomically challenged populations. The parent hospital would have to conduct a SWOT analysis, to identify its strengths, weaknesses, opportunities, and threats (Longest & Darr, 2008). In this case, the presence of a family medicine residency program is a great strength, both in clinical and economic ways. Family medicine residents (and their faculty) are well versed in current, best standards of care. Graduate medical education often provides significant revenue streams, as described below. Up to four residents can work under the supervision of a single faculty physician; often the number of patients seen in a residency clinic far exceeds that of a private office. Weaknesses include the presence of other residency clinics in the region, as well as difficulties recruiting quality residents to a new training program that has no established reputation.

It can also be difficult to recruit and retain skilled and motivated faculty physicians for progams, as the compensation for such academic positions is often less than that of purely clinical posts. Threats to this proposal include changes in GME funding (external environment) and the possibility of the residency program losing its accreditation (internal and external environment). In scanning the external environment of the organization, it is possible to identify specific geographic locations that have significant numbers of uninsured/underinsured patients (but still within the hospital’s catchment area). It would also have to be convenient to public transportation, such as bus stops, subway stations, or railroad stations.

Analysis of the various economic, political, demographic, and regulatory sectors would also identify the best time and location to create such a clinic. Significant forecasting would also have to confirm that the current external environment would not change in a way that would significantly worsen the chances for the clinic’s success. The creation of this new community health center would fall under the hospital’s directional strategy, as most hospital’s mission and vision statements include caring for the needy in their communities (Longest & Darr, 2008).

Management and Personnel Structure

Being a hospital-owned facility, a hospital administrator would be the senior manager / liaison; this would most likely be the Vice President for Ambulatory Affairs or Chief Medical Officer. The organization itself would have two chief administrators reporting to the hospital liaison; an Administrative Director (who would be the middle manager responsible for the overall management and vision of the center) and a Medical Director (who would be responsible for clinical activities, supervision, and initiatives). The Medical Director might well be the hospital’s department Chair of Family Medicine. The family medicine residency program would require a full-time physician serving as both Director of Medical Education and residency Program Director. The residency itself would have 24 residents. In order to maintain an appropriate ratio of preceptors to trainees, there would need to be at least 4 full-time faculty attending physicians (American Osteopathic Association, 2011)

An office supervisor (first-level manager) would be responsible for the day-to-day operations in the front (reception) and back (finance) portions of the office. In the front office, the practice would need 3 receptionists who would register patients upon their arrival and answer telephone calls. They would also verify patients’ insurance status. The back office would require 2 coders who would be responsible for verifying correct coding for practice visits, submit claims, and process payments from both patients and third-party payors. Another clerical staff member would be needed to process pre-authorizations and referrals (both incoming and outgoing). Finally, a charting person would be needed (even in an electronic medical record-equipped practice) to accommodate incoming paper / faxed documents.

The middle (clinical) part of the office, would require 2 medical assistants who would be responsible for bringing patients from the waiting room into the appropriate area (exam room, laboratory, or procedure room) and triage them (taking and recording vital signs, documenting the chief complaint, and verifying medications and allergies). A registered nurse and licensed practical nurse would be needed to administer vaccinations and medications. Finally, a phlebotomist / lab assistant would be needed to perform venipuncture’s, prepare specimens, and perform CLIA-waived tests. The registered nurse would also serve as the Clinical Supervisor (first-level manager) for the clinical support staff.

Funding Model

Medicare is the primary formal financier of graduate medical education programs, contributing 72 percent of all tax-financed support. Other federal payors include Medicaid (11 percent), the U.S. Department of Veterans Affairs (10 percent), the U.S. Department of Defense (3 percent), and the Bureau of Health Professions (3 percent) (Young & Coffman, 1998). A teaching hospital will receive direct medical education (DME) payments cover the cost of resident and faculty stipends and benefits, and overhead costs that are directly related to the teaching programs, such as ambulatory office space. Hospitals also receive funding for indirect medical education (IME) costs because teaching hospitals have more complex case mixes, more uninsured patients, and provided services that were costly but not necessarily well reimbursed, such as trauma centers and transplants units (Cymet & Chow, 2011). These payments are, on average, total $100,000 per resident per year.

However, over the last 20 years, the federal government has either frozen GME funding or in some cases, reduced it significantly (especially under the Balanced Budget Act of 1997) (Phillips, et al., 2004). Currently, the family medicine residents in this proposal do result in a net gain for the hospital. With an average salary of $45,000 plus $20,000 in benefits, the hospital stands to net $35,000 per resident. For a program of 24 residents (8 in each year), the hospital would have a net income of $840,000 from Medicare GME funding. Each of the faculty physicians would have their own clinical practice (about 0.25 FTE), so they would bill Medicare and third-party payors for their services. They would have a productivity plan whereby each month they would receive 25% of their revenue after fulfilling their monthly salary/benefit costs.

Physical Characteristics / Layout of the Facility

Because of the educational nature of the practice (i.e. a residency teaching clinic), the physical layout of the facility has specific needs. In the front portion of the office, the waiting room needs to have ample seating to allow for extended wait times associated with teaching clinics. The waiting room would also have to be child-friendly, with easily disinfected toys (i.e. no stuffed animals). Because many potential patients will have to apply for Medicaid or hospital-based charity programs, it would be ideal to have an office (or at least a kiosk) where a financial coordinator could meet with patients in a private area. Since this would be a multi-specialty practice with dozens of residents and attending physicians, there would need to be a large number of exam rooms, perhaps 18, all with exam tables equipped with stirrups to accommodate pelvic exams, Pap smears, and STD testing. There would also need to be a large procedure room to accommodate the need for various gynecological (colposcopy, endometrial biopsy, IUD placement/removal, etc.) and other types of procedures (suturing, biopsies. etc.).

The center would also have a spacious area dedicated to residents for charting and research, as well as two precepting rooms where clinical cases can be discussed with faculty physicians. There would be a conference room equipped with a computer and LCD projector for presentations and discussions. Numerous computer workstations throughout the clinic would allow access to an electronic medical records system. One exam room could be equipped for videotaping that is used (with the patient’s permission) to observe residents as they demonstrate the core competencies while providing patient care. The center would need a laboratory for the collection and processing of blood and other specimens. In order to avoid the same stringent regulations and testing associate with a hospital or reference laboratory, the center would only perform CLIA-waived tests such as finger-stick blood glucose testing, throat cultures, and urine dipstick analysis (CDC and CMS, 2006). The building would also ideally have offices for each of the faculty attending physicians, as well as for administrative and support staff.

Clinical Practice

As mentioned previously, this community health center would offer multiple specialties. The main service would be primary care. Family medicine residents, under the supervision of faculty preceptors, would provide general internal medical, pediatric, obstetric (pre- and post-natal), and gynecologic care to patients of all ages. Additionally, other specialty physicians would be available for special “clinics”: obstetrics (perinatal) and advanced gynecology twice a week, dermatology once a week, and general surgery, gastroenterology, pulmonology, cardiology, and urology once a month. These specialty services are essential in serving the needs of the target population: uninsured and underinsured (i.e. Medicaid) patients who are unable to see these specialists in private practice.

Credentialing

The Chair of Family Medicine is responsible for maintaining records of each attending physician’s credentials. These would include a New York State Medical License (with updated registration), DEA registration (to prescribe controlled substances), copies of medical school and residency diplomas, proof of board certification (and maintenance), records of continuing medical education, and CPR/Advanced Cardiac Life Support training cards.

The Director of Medical Education / Residency Program Director is responsible for maintaining records for each resident physician such as their medical school diplomas/transcripts, licensing examination transcripts, ACLS training, and signed residency contracts.

Local zoning and legal concerns

Consideration must be given as to the choice of commercial property for this ambulatory health center. The ideal location would be a pre-existing medical office building that has already been zoned for a medical practice, and has the required number of parking spaces (especially handicapped) and adequate access in and out of the building. A multi-level building must have elevators that are compliant with ADA (Americans with Disabilities Act) regulations. In County, a Certificate of Need must be granted before a new healthcare facility can be built. There are also village and town zoning ordinances that must be considered when modifying or creating a medical office building . The center would fall under the jurisdiction of the same regulatory bodies as that of its parent hospital, and would be setup as a not-for-profit organization, since a significant portion of its care would be uncompensated.


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