The Health Care Industry
Healing Hands Hospital is an acute care community hospital that serves a suburban community outside of a large city with two competing large academic medical centers. Both Healing Hands Hospital and the academic medical centers have a long history of service to the region, but their business and fundamental practices are different. Your manager, Ms. Woods, Healing Hands' Chief Operating Officer (COO), is part of the task force working on the strategic plan for the hospital and needs to understand the fundamental practices of these academic medical centers.
You have been tasked with providing this information for Ms. Woods in a 1-2-page paper that discusses the similarities and differences between academic medical centers and acute care community hospitals. Your paper should address each of the following prompts below:
Explain the similarities and differences between the mission of an academic medical center versus the mission of an acute community hospital.
Discuss the similarities and differences in the staffing and management structure of an academic medical center versus an acute community hospital. Note: You will want to consider what type of staff an academic medical center would have that a community hospital may not have.
Explain the similarities and differences in the Reimbursement model(s) that are used in academic medical centers versus an acute community hospital.
Sample Solution
While both Healing Hands Hospital and the large academic medical centers serve the same core function of patient care, their strategic priorities, staffing models, and financial landscapes differ significantly. Understanding these differences is crucial for Healing Hands to develop a competitive strategy in the face of competition.
Mission and Focus:
- Academic Medical Centers (AMCs): AMCs prioritize a three-pronged mission: patient care, research, and education. They often specialize in complex cases, attracting patients requiring advanced treatments. Research is a cornerstone of AMCs, contributing to medical advancements and attracting top-tier physician-researchers. Additionally, AMCs train the next generation of healthcare professionals through residency and fellowship programs
Full Answer Section
- Acute Care Community Hospitals: Community hospitals focus primarily on delivering high-quality, efficient care for common medical conditions. They serve a local population, providing services like emergency care, general surgery, and obstetrics. While some community hospitals may conduct limited research, education is not a primary focus.
- AMCs: Due to their research and education missions, AMCs have a wider range of specialized staff. They employ a significant number of residents, fellows, and researchers alongside attending physicians. Management structures are often complex, with dedicated departments for research administration and residency programs.
- Community Hospitals: Staffing in community hospitals tends to be more streamlined, focusing on core clinical specialties. Residents and fellows are less common, as education is not a primary function. Management structures are typically flatter, with a focus on operational efficiency and patient satisfaction.
- AMCs: Due to the complexity of cases they handle and the presence of residents who may not bill independently, AMCs rely more heavily on diagnosis-related group (DRG) reimbursement. DRGs provide a fixed payment based on the patient's diagnosis and severity of illness. Additionally, AMCs may receive government grants for research activities.
- Community Hospitals: Community hospitals primarily utilize fee-for-service (FFS) reimbursement, where they receive payment for each service rendered. This model incentivizes efficiency and volume. Some community hospitals may also participate in accountable care organizations (ACOs), which receive bundled payments for managing a patient population's overall health.
- Highlight Local Focus: Healing Hands can emphasize its strength in providing personalized, efficient care to the local community.
- Develop Specialized Services: Offering high-quality services for specific conditions, such as orthopedics or cardiology, can attract patients within the community.
- Partner with AMCs: Collaboration on specific services or clinical trials could leverage the strengths of both institutions.
- Invest in Technology: Utilizing advanced technologies can help Healing Hands compete with the resources of AMCs.