NHS-FP6008 Assessment 1 Context Assessment 1 Context Health Care Economics: An Industry Overview Providers and consumers of health care services have experienced significant changes following the enactment of the Patient Protection and Affordable Care Act of 2010 (Affordable Care Act). New terminology, concepts, methods of valuation, reimbursement, and decisions accompanied this landmark legislative change. Health care leaders are responsible for maintaining the financial viability of their organizations, aligning with both the organizational mission statement and directional strategy, and allocating finite resources. This task has become increasingly complex due in part to changes associated with the Affordable Care Act. Conditions of participation in state-funded and federally funded health care programs have generated new requirements, and some represent major challenges with respect to implementation and compliance. An example of this can be seen with the electronic medical records (EMR) initiative, which has been an ongoing challenge. Leaders must grapple with questions such as: • What is the actual cost to the organization? • Are there funding shortfalls for full implementation? • Are there unexpected additional costs that result from existing software incompatibilities? • Are there additional security measures to ensure HIPAA compliance, such as staff training? • What about patient satisfaction scores and how these can affect reimbursement? The role of the health care executive in exercising sound economic decision making has become increasingly challenging, especially when one considers the potential adverse financial and operational consequences, or civil and criminal penalties, that can result from oversights or errors. Health care executives serve in a fiduciary role within their organizations and communities. To this end, it is helpful for leaders to understand applicable laws that drive economic decision making and its accepted tools from authoritative sources, industry standards, and risk management. The Provider Organization How have recent changes in health care affected your current or future desired role within the industry? Do you recognize new concepts and terminology emerging with our changing health care system? To illustrate this point, consider your familiarity with the following economic concepts and their associated implications for providers: accountable care organizations, Readmissions Reduction Program, HCAHPS scores, HAC Reduction Program, never events, value-based purchasing, open payments public data, cost shifting, risk sharing, and medical capital equipment (lease versus purchase). These are just a few examples of facets that involve financial, and thus economic, decision making. It is important to maintain the environmental, larger perspective and to understand what resources are available from the government for economic problem solving and decision making. It is also important to maintain "bifocal vision" as you consider demand, supply, and finite human and financial organizational resources. 1 As a health care leader, you will be challenged to maintain organizational financial viability and to participate in team-based decision making. A few examples of critical economic decisionmaking topics are the acquisition of necessary capital medical equipment, adjustment of clinical staffing ratios, funding unexpected implementation and maintenance costs of EMRs, and funding under-insured and uninsured patient care. Health Care Supply and Demand Economics in health care can vary from the typical dynamics of other industries. The rules of supply and demand are influenced in unique ways. Examples of this can be seen in the fact that physicians can both supply services as well as control demand for health care services. Additionally, consumers of health care services can have a need or demand for services, but may not be able to access supply or available care due to geography or financial constraints (such as a high insurance deductible). Suppliers or providers of care can deliver a service and not be reimbursed for the service by the consumer if various quality and satisfaction standards are not met. Government regulations can also impact reimbursement. An example of this can be observed in a problematic readmission within 30 days of a patient's discharge from a hospital. If the readmission meets criteria for being preventable, the provider may not be reimbursed for services, nor may the provider bill the patient for services already consumed. 2 Running head: PROPOSAL OF NEW ECONOMIC OPPORTUNITY Executive Brief: Proposal of New Economic Opportunity Learner’s Name Capella University Health Care Economics and Decision Making Executive Brief: Proposal of New Economic Opportunity November, 2017 Copyright ©2018 Capella University. Copy and distribution of this document are prohibited. 1 PROPOSAL OF NEW ECONOMIC OPPORTUNITY 2 Executive Brief: Proposal of New Economic Opportunity The primary objective of Whilborne Medical Center (WMC) has always been to deliver high-quality health care to the community. The medical center can take a step further in that direction by setting up a new urgent care center (UCC) within its premises. A UCC is a health care facility that provides immediate care, without a scheduled appointment, for injuries and illnesses that are not life-threatening and do not require admission to the emergency department (ED). The key characteristics of a UCC are reduced wait times, increased service hours, reduced costs, and quick service (Chang, Brundage, & Chokshi, 2015). WMC is located in an area that has around 3,000 locals whose urgent care needs may be met by the UCC. Additionally, WMC, being located near Maxima Industrial Park, receives a lot of cases of work-related injuries (e.g., minor burns, sprains, cuts, and abrasions) and other minor illnesses (e.g., fever, headache, ear infection, abdominal pain, and respiratory illnesses) that require immediate attention. Currently, such cases are handled by the medical center’s ED, which leads to overcrowding and reduced efficiency. Once the UCC is set up, such cases can be diverted to the UCC to ease the burden on the ED at the medical center. Outcomes of Starting an Urgent Care Center WMC has always strived to focus on the six areas of health care quality—timeliness, safety, patient-centeredness, efficiency, equity, and effectiveness—stated by the Institute of Medicine (IOM). Setting up a UCC will help the medical center achieve its vision of improving community health and delivering superior health care, irrespective of patients’ cultural background, age, gender, and socioeconomic status (Agency for Healthcare Research and Quality, 2016). Copyright ©2018 Capella University. Copy and distribution of this document are prohibited. PROPOSAL OF NEW ECONOMIC OPPORTUNITY 3 The new line of service will be convenient for patients with noncritical conditions that require immediate attention. They will not have to wait for several hours as they do at the medical center’s ED. They will be able to walk in without an appointment and avail after-hours health care services on all days of the week. Setting up a UCC will help the ED concentrate on critical, life-threatening medical cases; it will also improve the efficiency of the ED and the quality of care provided to patients (Qin, Prybutok, Prybutok, & Wang, 2015). Expenses on technology and infrastructure are comparatively low for setting up the UCC. Consequently, the cost of health care services provided at the UCC will be low in comparison to the cost of health care services at the ED of the medical center. Moreover, a UCC is an affordable means of availing health care services for noncritical ailments (Qin et al., 2015). This makes it an economically viable health care solution for the neighborhood. With its services, the UCC will generate additional revenue for the medical center. Although setting up a UCC has several positive outcomes, it has some negative outcomes, too. One of the drawbacks of getting treated at a UCC is that patients are likely to get care from different physicians every time they visit the UCC. This may result in the physicians not knowing their patients’ personal or family health history, and the patients may not receive the same quality of care they receive at their primary care physician’s office. In addition, although wait times at UCCs are shorter than at EDs, patients could end up waiting longer than when they would see their primary care physician with an appointment on days that the UCCs have high footfall. Also, more staff may have to be hired at the UCC, which will entail additional costs for the medical center. Factors Influencing the Setting up of an Urgent Care Center Copyright ©2018 Capella University. Copy and distribution of this document are prohibited. PROPOSAL OF NEW ECONOMIC OPPORTUNITY 4 A UCC is a volume-driven business that is dependent on many economic and environmental factors. Environmental data suggests that WMC is a reputed medical center in the area and there are few health clinics in the vicinity. The walk-in facility at the UCC and its proximity to Maxima Industrial Park will make it a preferred option for employees working at the industrial park. As the industrial park consists mainly of manufacturing units, there is a high possibility of work-related injuries. Therefore, the UCC can expect a high number of visits from these employees. Also, most employees at these companies work in shifts and sometimes on weekends. This is a great opportunity for the UCC as it plans to offer health care services even in the evenings and on weekends. The capital cost of the project is estimated to be $350,000. It will include the cost of construction, equipment, and furniture. There will be no land cost because the UCC will be built within WMC’s premises. One half of the required funds will be procured through a bank loan; the other half will be funded using the medical center’s reserves. It is assumed that an average of 357 patients will visit the UCC every week and the consultation fee for each patient will be around $156 (AMN Healthcare, 2015; Yakobi, 2017). Calculations suggest that the UCC will record a cash surplus in the first five years. This illustrates that starting a UCC will be an economically viable opportunity for the medical center. Analysis of Supply and Demand for the Urgent Care Center Aside from the 3,000 locals in the area who might benefit from the UCC at WMC, there is a large client base at the industrial park located near the center. Maxima Industrial Park comprises 10 companies, each having an employee strength of 2,000–3,000 individuals. In all, about 30,000 employees work here. There are just two primary health clinics and a retail health clinic around the industrial park, and WMC is the only multispecialty medical center located Copyright ©2018 Capella University. Copy and distribution of this document are prohibited. PROPOSAL OF NEW ECONOMIC OPPORTUNITY 5 within a 5-mile radius. Therefore, there are not enough facilities in the vicinity to cater to the medical needs of employees working in the industrial park, creating a supply–demand gap. Being the only multispecialty medical center near the industrial park, WMC receives a lot of cases pertaining to work-related injuries and minor illnesses that require immediate attention. This overloads the ED of the medical center with noncritical cases and hinders it from being able to focus on patients admitted for treatment of critical, life-threatening diseases. Establishing a UCC within WMC’s premises will contribute toward bridging the supply–demand gap without compromising on the quality of health care delivered. While analyzing the data pertaining to the supply and demand for the proposed UCC, areas of uncertainty have been identified. The successful implementation of this proposal would depend on receiving timely approval of the planned bank loan and approval from the board of directors of the medical center to allocate funds to support this proposal. Another area of uncertainty is the level of awareness of UCCs in the neighborhood. Therefore, there may be a need to create awareness of the functions and necessity of a UCC. Patients may not want to avail services at the UCC because of their lack of awareness, and this might negatively impact revenue estimates. Conclusion Setting up a UCC will reduce the burden on the ED at WMC, making it more efficient. Patients will receive accessible, high-quality, affordable care without a scheduled appointment, and they will benefit from the after-hours care. Also, the UCC will bring in additional revenue for the medical center and help acquire new patients. Therefore, setting up a UCC within WMC’s premises will be a lucrative economic opportunity. Copyright ©2018 Capella University. Copy and distribution of this document are prohibited. PROPOSAL OF NEW ECONOMIC OPPORTUNITY 6 References Agency for Healthcare Research and Quality. (2016). The six domains of health care quality. Retrieved from https://ahrq.gov/professionals/quality-patientsafety/talkingquality/create/sixdomains.html AMN Healthcare. (2015). Convenient care: Growth and staffing trends in urgent care and retail medicine. Retrieved from https://amnhealthcare.com/uploadedFiles/MainSite/Content/Healthcare_Industry_Insights /Industry_Research/AMN%2015%20W001_Convenient%20Care%20Whitepaper(1).pdf Chang, J. E., Brundage, S. C., & Chokshi, D. A. (2015, July 23). Convenient ambulatory care — Promise, pitfalls, and policy. The New England Journal of Medicine, 373(4), 382–388. Retrieved from https://search-proquestcom.library.capella.edu/docview/1698429950/fulltextPDF/393FB954D5614B03PQ/1?ac countid=27965 Qin, H., Prybutok, G. L., Prybutok, V. R., & Wang, B. (2015). Quantitative comparisons of urgent care service providers. International Journal of Health Care Quality Assurance, 28(6), 574–594. Retrieved from https://search-proquestcom.library.capella.edu/docview/1694933787?pqorigsite=summon&http://library.capella.edu/login?url=accountid=27965 Yakobi, R. (2017). Impact of urgent care centers on emergency department visits. Health Care: Current Reviews, 5(3). http://dx.doi.org/10.4172/2375-4273.1000204 Copyright ©2018 Capella University. Copy and distribution of this document are prohibited. Overview Propose an economic initiative that presents an opportunity for improved care quality. Master's-level health care practitioners are charged with the responsibility of constantly scanning the external environment for shifts in supply of and demand for services. Concurrently, leaders must examine strategic fit with their organization's directional strategy and determine if adjustments need to be made for current service offerings, updates in equipment, changes in staffing models, and a variety of other decisions. Each decision that is proposed must be evaluated in terms of the health care setting as a system, alignment with the mission and strategy, available internal resources, potential contract and payer source implications, and the short- and long-term economic effects at both the micro and macro levels. Note: Complete the assessments in this course in the order in which they are presented. By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria: • • • • Competency 1: Analyze the effects of financial and economic factors (such as costbenefit, supply and demand, return on investment, and risks) in a health care system on patient care, services offered, and organizational structures and operation. • Analyze the supply and demand for a proposed economic initiative within contexts relevant to a care setting. Competency 2: Develop ethical and culturally equitable solutions to economic problems within a health care organization in an effort to improve the quality of care and services offered. • Propose an economic initiative that presents an opportunity for a care setting at both the micro and macro levels, and that will provide ethical and culturally equitable improvements to the quality of care. Competency 3: Justify the qualitative and quantitative information used to guide economic decision making to stakeholders and colleagues. • Explain relevant economic and environmental data that support a proposal and analysis. Competency 5: Apply various communication methods in order to clearly, effectively, and efficiently relate information to stakeholders and colleagues related to economic data, findings, and strategies. • Communicate an economic proposal in a logically structured and concise manner, writing content clearly with correct use of grammar, punctuation, and spelling. • Effectively support a proposal with relevant economic data and scholarly sources, correctly formatting citations and references using current APA style. Questions to Consider As you prepare to complete this assessment, you may want to think about other related issues to deepen your understanding or broaden your viewpoint. You are encouraged to consider the questions below and discuss them with a fellow learner, a work associate, an interested friend, or a member of your professional community. Note that these questions are for your own development and exploration and do not need to be completed or submitted as part of your assessment. • • • What factors determine the price and quantity of health care? What factors determine the demand for health care services? What suggestions do you have for improving the economic situation of your current health care setting? How might strategies or priorities need to shift to keep up with the changing health care economic environment? How do the Centers for Medicare & Medicaid Services (CMS) regulations impact documentation, billing, and reimbursement? Assignment Instruction In this assessment, you will propose an economic initiative that presents an opportunity for improved care quality. Scenario As an emerging health care leader, the senior management has requested that you independently research and explore one of the economic opportunities that may be available in your care setting. This may be offering a new service line, working to improve a service line already offered, retiring an outdated or unprofitable service line, or any other economic initiative that you believe will be of benefit to your care setting in the short and long term. One example of this is a recently launched partnership with a local bicycle sharing company. Your care setting partners with them to host healthy community events that offer free screenings for early detection of various health issues. This helps fulfill some of your care setting's preventive and healthy lifestyle initiatives, while also potentially driving referrals to other services provided by your care setting. You have been asked to submit your proposal in the form of a 2–4-page executive summary that includes your proposed economic initiative, supporting economic data, and an analysis of the proposal's benefits for your department and for the care setting overall. Directions You have been asked to ensure that your report addresses the following. Note: The bullet points below correspond to grading criteria in the scoring guide. Be sure your work is, at minimum, addressing each of the bullets below. You may also want to read the scoring guide and the Guiding Questions: Executive Brief: Proposal of New Economic Opportunity document, linked in the Resources, to better understand the performance levels that relate to each grading criterion: • Propose an economic initiative that presents an opportunity for your care setting at both the micro (departmental, neighborhood) and macro (organizational, community) levels that you believe will provide ethical and culturally equitable improvements to the quality of care. • Analyze the supply and demand for your proposed economic initiative within contexts relevant to your care setting. • Explain relevant economic and environmental data that support your proposal and analysis. • Communicate your economic proposal in a logically structured and concise manner, writing content clearly with correct use of grammar, punctuation, and spelling. • Effectively support your proposal with relevant economic data and scholarly sources, correctly formatting citations and references using current APA style. Example Assessment: You may use the assessment example, linked in the Assessment Example section of the Resources, to give you an idea of what a Proficient or higher rating on the scoring guide would look like. Additional Requirements Your assessment should meet the following requirements: • • • Length: 2–4 double-spaced, typed pages. Your proposal should be succinct yet substantive. APA format: Resources and citations are formatted according to current APA style. Resources: Cite 3–5 authoritative and scholarly resources. Be sure to include specific economic data and support as part of your cited resources. 6/18/2019 Executive Brief: Proposal of New Economic Opportunity Scoring Guide Executive Brief: Proposal of New Economic Opportunity Scoring Guide CRITERIA NON-PERFORMANCE BASIC PROFICIENT DISTINGUISHED Propose an economic initiative that presents an opportunity for a care setting at both the micro and macro levels, and that will provide ethical and culturally equitable improvements to the quality of care. Does not propose an economic initiative that presents an opportunity for a care setting at both the micro and macro levels, and that will provide ethical and culturally equitable improvements to the quality of care. Proposes an economic initiative, but the description fails to include the micro level, the macro level, ethical equity, cultural equity, or improvements to the quality of care. Proposes an economic initiative that presents an opportunity for a care setting at both the micro and macro levels, and that will provide ethical and culturally equitable improvements to the quality of care. Proposes an economic initiative that presents an opportunity for a care setting at both the micro and macro levels, and that will provide ethical and culturally equitable improvements to the quality of care, including an impartial explanation of possible negative outcomes of the proposed initiative. Analyze the supply and demand for a proposed economic initiative within contexts relevant to a care setting. Does not analyze the supply and demand for a proposed economic initiative within contexts relevant to a care setting. Attempts to analyze the supply and demand for a proposed economic initiative, but fails to correctly apply economic or demographic data relevant to supply or demand. Analyzes the supply and demand for a proposed economic initiative within contexts relevant to a care setting. Analyzes the supply and demand for a proposed economic initiative within contexts relevant to a care setting, and identifies knowledge gaps, unknowns, missing information, unanswered questions, or areas of uncertainty (where further information could improve the analysis). Explain relevant economic and environmental data that support a proposal and analysis. Does not explain relevant economic and environmental data that support a proposal and analysis. Presents data that are not relevant, omit key economic or environmental aspects, or fail to support the proposed initiative. Explains relevant economic and environmental data that support a proposal and analysis. Explains relevant economic and environmental data that support a proposal and analysis, explains data that conflict with the proposal, and identifies missing data. Communicate an economic proposal in a logically structured and concise manner, writing content clearly with correct use of grammar, punctuation, and spelling. Does not communicate an economic proposal in a logically structured and concise manner, writing content clearly with correct use of grammar, punctuation, and spelling. Communicates in a manner that is not consistently clear, logically structured, or concise; errors in grammar, punctuation, or spelling distract from the message. Communicates an economic proposal in a logically structured and concise manner, writing content clearly with correct use of grammar, punctuation, and spelling. Communicates an economic proposal in a logically structured, clear, concise, and persuasive manner; grammar, punctuation, and spelling are without errors. https://courserooma.capella.edu/bbcswebdav/institution/NHS-FP/NHS-FP6008/180700/Scoring_Guides/a01_scoring_guide.html 1/2 6/18/2019 Executive Brief: Proposal of New Economic Opportunity Scoring Guide CRITERIA NON-PERFORMANCE BASIC PROFICIENT DISTINGUISHED Effectively support a proposal with relevant economic data and scholarly sources, correctly formatting citations and references using current APA style. Does not effectively support a proposal with relevant economic data and scholarly sources, correctly formatting citations and references using current APA style. Includes data or sources that lack relevance, or incorrectly formats citations or references. Effectively supports a proposal with relevant economic data and scholarly sources, correctly formatting citations and references using current APA style. Effectively supports a proposal with relevant economic data and scholarly sources, correctly formatting citations and references using current APA style. Citations are free from all errors. https://courserooma.capella.edu/bbcswebdav/institution/NHS-FP/NHS-FP6008/180700/Scoring_Guides/a01_scoring_guide.html 2/2
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