Hospitals are healthcare facilities that provide medical care for a wide-range of injuries and illnesses utilizing diverse and specialized staff and equipment. Hospitals serve a vital role in healthcare as they are the primary medical care facilites for emergency care and treatment of serious health conditions. Our discussion of hospitals will include individual hospitals as well as wide-spanning hospital systems, which can include multiple hospitals as well as a variety of outpatient clinics and associated practices. Very often hospitals have an emergency room as part of the hospital, but the discussion of emergency rooms is important enough to warrant its own separate topic. In addition to general hospitals, which are the best known type, there are specialized hospitals, including rehabilitation and children's hospitals. Teaching hospitals combine many services of a general hospital with education of medical students and nurses and are often associated with a nearby medical school or university. There are also safety-net hospitals that accept all patients regardless of their ability to pay.
Hospitals serve an absolutely critical role in healthcare delivery and cannot be replaced by any other type of provider. The care provided by hospitals spans the entire spectrum of medical specialties, and in general, all high-risk testing, procedures, and surgeries should be performed in a hospital. Different terms are used for various types of hospital care. Emergency care is offered in hospitals that have an emergency room. Inpatient care is defined as care that occurs when a patient is admitted to the hospital and stays overnight. Hospitals also provide outpatient care, which is defined as same-day medical care that does not require admission or an overnight stay in the hospital. Many of the outpatient practices that reside in the medical offices that surround a hospital are hospital-owned or affiliated. Hospitals are even venturing into urgent care centers and other outpatient clinics and practices outside of the main hospital campus.
Hospitals, especially collosal hospital systems, normally have a relatively large amount of bargaining power with health insurance payors because of their size and the fact that their communities generally truly need them. Hospitals bill Medicare under various Prospective Payment System (PPS) reimbursement methodologies depending on the type of care provided. PPS reimbursement is normally higher than the Medicare Physician Fee Schedule (MPFS) reimbursement that we discuss in the private and group practice area. What this means is that the same services provided by a hospital-owned outpatient practice generally cost more than they would at a physician-owned outpatient practice. Healthcare has experienced a recent trend of hospitals buying private and group practices, and when this happens, patients usually see their out-of-pocket costs go up even though they are visiting the same doctors they've seen for years. This is because once the hospital acquires the practice, they change the billing schedule over from the physician-owned rates to the hospital-owned rates.
Customer service in hospitals can vary, especially in emergency rooms where how busy they happen to be and what condition a patient presents with can influence wait times. If you present in the ER with a non-urgent issue, such as a sore throat or a runny nose, you are not going to be high on their priority list, and you can expect to wait awhile. Hospitals generally only feel competitive pressure from other hospitals in their service area and perhaps from well established and popular group practices, and this competition is what would most likely cause them to improve access and other patient experience indicators.
Perhaps the most significant benefit of hospitals is their quality of care. Because of their size and the fact that they handle very serious medical cases, hospitals are highly regulated. Just about all are required to be accredited and most do so through the Joint Commission, which imposes fairly rigorous quality and safety standards with which hospitals must comply. Hospitals also report on quality standards, and there are tools available through Medicare to compare hospitals on quality.
Hospitals serve a vital role in every community as they provide emergency services and care for serious conditions that outpatient practices are not equipped to provide. However, services performed at hospitals and hospital-owned practices generally cost more, so in non-urgent situations it may be smart to shop around before seeking services. Having said that, hospitals are generally held to higher quality and patient safety standards than many private and group practices.
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