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QUESTION

# Response to student needed

Whew! I think this is probably the toughest assignment for this course.

I believe the not-for-profit (N-F-P) hospital systems provide more charitable healthcare services than for-profit (F-P) systems. I have been fortunate(?) to work in both types of systems, mostly in the not-for-profit arena though.

Let me address the for-profit first. The F-P hospital system I worked for was or is owned by a group of physicians. Not sure if they still own the organization. Because of the sheer size of the group of doctors (163), I didn’t know all of them. Those I did or do know were foreign – they were citizens but were of other nationalities. There is no doubt that money drives the current of care.  I was the department manager for my profession. Everything was still on paper except billing. However, I discovered that there were errors in the billing number codes for a number of our services. Some, fortunately, were not billed to patients but used more as inventory and service tracking. Unfortunately, there were several that did get billed to patients. There was not a lot of cost difference between the error charge and the correct charge but total cost was significant. This required re-billing and correcting bills, some that went back for some time. It also required contacting Medicare. Understandably, there was a bit of a stir in upper management when informed of the error and that it had to be corrected. The error enabled me to easily make the case for creating a department database with our charges that those billing could easily transfer the correct numbers to bill the patient’s account. Another issue centered on a service we provided that delivered a dry gas to the patient. Most patients complained about this on a regular basis. Evaluating the cost difference between the system for dry gas and one which delivered humidified gas had a price difference of $8 for the dry and$25 for the humidified. A significant difference. However, it stopped all the complaints from patients. Remember, until it is changed, patient satisfaction is a driving factor in reimbursement for hospitals. So, does the cost difference exceed the reimbursement difference between a satisfied and not satisfied patient? Since $17 dollars is the cost difference unless the circuit gets very soiled (incredibly rare), the reimbursement easily outstrips the cost of the circuits. Generally, a patient uses this device for only a few days but the oral cavity and throat become dry in less than an hour. Another example, same system. Our ventilators (for patient life support) were an aging population. The company that manufactured them had long since ceased support or repairs and had introduced an incredibly excellent newer model (PB 840 is the model). The company representative worked with me and we settled on an awesome deal – we could replace our outdated machines (8 in total number – 4 functioning and 4 for parts) and upgrade our existing PB 840s to the latest software for$45,000! Considering that three new machines are easily greater than that cost so we would basically get one free and free upgrades on our two existing models. A really great deal! The group that bought the facility was a group of doctors. Even though I demonstrated what the cost for 4 machines and upgrades would normally cost, they refused to accept the offer. All I could do was sit in dumbfoundry. If that’s not a word, it should be. In a F-P system, the owners share any profit or loss between them generally distributed based on the percentage of ownership.

Perhaps the first thing to cover here is making the point that not-for-profit does not mean that the organization breaks even or loses money all the time. The goal is to actually make a profit, however, by the not-for-profit status, all profit is turned back into the organization to help cover costs lost for caring for indigent patients, improve the facility, buy new equipment, build new structures, develop and offer new services and so on. Sometimes, depending on the previous year, staff may be paid bonuses as a thank you for their hard work. The N-F-P systems may, just by their nature, provide more charitable care. Money seems to be less a current of care than with F-P systems. While that doesn’t mean that there is no one watching the pennies, there seems to be less emphasis on cost. It is not my intention to imply that F-P systems deliver a lower standard of care than N-F-P systems, it just seems that money is less of a factor in patient care. F-P systems are looking for a way to get paid as soon as the patient crosses their threshold. A N-F-P usually waits until the patient says, “Hi.” That’s a joke if you didn’t get it.

N-F-P are, shall we say, more prolific than F-P systems. Many N-F-P systems are associated to one degree or another with a religious organization. When I lived, and worked in Kalamazoo, MI, there were two hospitals in the city. One was owned by an order of the Catholic church. The other was affiliated with the Methodist church though rumor was that the affiliation was in name only so not sure how much influence that religious organization wielded in the hospital. The Catholic hospital got into financial distress. The order of the church that owned it, bailed it out but informed management that it was a one-time deal. Next time, the doors would close. So they went through their system and eliminated every service that lost money or only broke even. I worked at the other hospital – we were overrun with pediatric patients. We housed the Pediatric ICU and a pediatric floor but they had hosted the Cystic Fibrosis clinic of which there were about 60 patients in the service area. WOW!!! We were like a children’s hospital for a while. The upside was that we gained a pediatric pulmonologist in the deal. He was a pretty good doctor too, always interested and looking for anything that would improve the lives of his patients.

There are some additional examples I would like to share from where I work now but my concern relates to HIPPA violations. Those could cost me my job.

Both systems must watch costs, revenue, and other aspects of business. After all, if a business doesn’t make a profit, it either closes or is sold and those working there may lose their jobs. Both systems are incredibly adept at collecting debt owed to them. Healthcare systems are probably second only to the IRS for collecting debts. Also like the IRS, many systems are willing to work with patients in getting their bills satisfied but the patient or family must contact the organization to work out the details.

I will Pay \$6.00 for a Substantive Response to this students DB.