NUR5133 Module 1 healthcare system structure analysis example

Where a Children's Hospital Sits in a System Built for Adults: The Structure of US Healthcare Read From One Freestanding Pediatric Hospital

Student Name

American College of Education

NUR5133: Knowledge of the Healthcare Environment

Module 1 Assignment

Instructor Name

September 7, 2027

The Organization

The organization examined in this course is a composite 210-bed freestanding children's hospital in a Midwestern metropolitan area of about 1.5 million people. It is a private nonprofit corporation, affiliated with a university medical school for teaching, and it is the only hospital within 150 miles with a pediatric intensive care unit, a neonatal intensive care unit at the highest level and pediatric surgical subspecialties. It employs about 1,100 registered nurses. Last year 58% of its patient days were paid by Medicaid or by the program that covers children just above the Medicaid income line, the Children's Health Insurance Program (CHIP), 38% by commercial insurance and less than 1% by Medicare. The author is a nurse manager on its medical-surgical floors.

Financing

Shi and Singh (2022) describe the US system as a patchwork in which financing, insurance, delivery and payment are split among many private and public actors rather than organized by a single national plan. Most working-age adults and their children are covered by employer-sponsored private insurance; adults aged 65 and older are covered by Medicare, a federal program; and low-income people are covered by Medicaid, which Washington and each state pay for together and which each state administers under federal rules. CHIP extends coverage to children in families whose incomes are too high for Medicaid but too low to afford private coverage.

The children's hospital sits in a different part of this patchwork from most hospitals. Medicare, the largest single payer for adult hospitals and the program around which much federal payment policy is designed, pays almost nothing to a children's hospital. Instead, the hospital depends on Medicaid and CHIP, whose rates are set by each state and are usually lower than commercial rates. Its finances are therefore tied to decisions made in the state capital, including Medicaid eligibility rules, managed care contracts and payment rates, more than to federal Medicare policy. Even its funding for training pediatric residents comes through a separate federal program for children's hospitals rather than through Medicare, as it does for adult teaching hospitals.

Within Medicaid, the way payment is administered has also changed. Most children covered by Medicaid in the hospital's state are enrolled in managed care plans, private companies that contract with the state to administer benefits and negotiate their own rates and authorization rules with hospitals. The children's hospital therefore negotiates with four Medicaid managed care plans as well as with commercial insurers, and each plan's rules on prior authorization, length of stay and observation status affect how the hospital's nurses document care and how quickly patients can be discharged. A nurse manager on the medical-surgical floors meets these rules daily, in the form of utilization review questions about whether a child with bronchiolitis still needs an inpatient bed.

For a children's hospital, the most important health policy decisions are made not in Washington but in the state Medicaid office.

Delivery

Delivery in the US system is organized in levels: primary care in offices and clinics, secondary care in community hospitals, tertiary care in regional referral centers and post-acute and long-term care afterward (Shi & Singh, 2022). Pediatric care has become concentrated at the tertiary level. From 2008 to 2018, US hospitals lost almost a fifth of their pediatric inpatient units and about an eighth of their general pediatric beds, while pediatric intensive care beds rose by 16.0%, mostly at children's hospitals; rural areas lost pediatric beds faster, and nearly a quarter of US children saw the distance to their nearest pediatric unit increase (Cushing et al., 2021).

The children's hospital is on the receiving end of this trend. In the past five years, three community hospitals in its region closed their pediatric units, and children who would once have been admitted locally for asthma, bronchiolitis or dehydration now come to the children's hospital, often by ambulance transfer. The hospital's medical-surgical floors therefore care for a growing share of children with common, lower-acuity illnesses alongside children with rare and complex conditions. Its emergency department also receives transfers from community emergency departments that see children infrequently and may be less prepared to stabilize them.

That preparedness matters. In a study of more than 20,000 critically ill children who arrived at 426 hospitals, in-hospital mortality fell steadily as the emergency department's pediatric readiness score rose, from 11.1% in the least prepared quarter of hospitals to 3.4% in the most prepared, and after adjustment for age, chronic conditions and severity, children seen at the most prepared hospitals had one quarter the odds of dying of those seen at the least prepared (Ames et al., 2019). As community hospitals close their pediatric units, their emergency departments see fewer children and have fewer pediatric nurses to keep skills current, so the regionalization of inpatient care can quietly weaken the first link in the chain. The children's hospital therefore depends on the readiness of hospitals it does not own or control, a theme this course returns to in its final module.

Oversight

Oversight in the US system is shared among federal agencies, states and private accrediting bodies. To receive payment from Medicare or Medicaid, a hospital must meet the federal Conditions of Participation, which it usually demonstrates through accreditation by an approved private body such as The Joint Commission. States license hospitals and nurses, set Medicaid policy and, in many states, regulate the building of new facilities. Federal law also requires hospitals with emergency departments to examine and stabilize every person who comes in, whether or not they can pay (Shi & Singh, 2022).

For the children's hospital, the practical effect is layered accountability. Although it has almost no Medicare patients, it must meet the Medicare Conditions of Participation because it accepts Medicaid. It is accredited by The Joint Commission, licensed by the state health department and subject to state rules on nurse licensure, which the author's floors feel directly when recruiting nurses from neighboring states. Module 2 examines one set of these standards in detail.

What the Hospital's Position Means for Nurse Administrators

Three implications follow for nurse leaders at the children's hospital. First, because the hospital depends on Medicaid, nurse administrators must follow state Medicaid policy as closely as adult hospital leaders follow Medicare rules; a change in eligibility or managed care contracts can change the hospital's volume and revenue within months. Second, because pediatric care is concentrating at the tertiary level, the medical-surgical floors must be staffed and organized for a broader range of acuity than in the past, and the hospital has a stake in the readiness of community emergency departments that send it patients. Third, because the hospital sits outside the adult-focused center of the system, it must often make the case for children's needs to policymakers and payers who design programs around adults. These three themes, state policy, regionalization and advocacy, will recur through the rest of this course.

References

Ames, S. G., Davis, B. S., Marin, J. R., Fink, E. L., Olson, L. M., Gausche-Hill, M., & Kahn, J. M. (2019). Emergency department pediatric readiness and mortality in critically ill children. Pediatrics, 144(3), Article e20190568. https://doi.org/10.1542/peds.2019-0568

Cushing, A. M., Bucholz, E. M., Chien, A. T., Rauch, D. A., & Michelson, K. A. (2021). Availability of pediatric inpatient services in the United States. Pediatrics, 148(1), Article e2020041723. https://doi.org/10.1542/peds.2020-041723

Shi, L., & Singh, D. A. (2022). Delivering health care in America: A systems approach (8th ed.). Jones & Bartlett Learning.